I
105TH CONGRESS
1ST SESSION
H. R. 16
To provide a program of national health insurance, and for other purposes.
IN THE HOUSE OF REPRESENTATIVES
JANUARY 7, 1997
Mr. DINGELL introduced the following bill; which was referred to the Commit-
tee on Commerce, and in addition to the Committee on Ways and Means,
for a period to be subsequently determined by the Speaker, in each case
for consideration of such provisions as fall within the jurisdiction of the
committee concerned
A BILL
To provide a program of national health insurance, and
for other purposes.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
That this Act, with the following table of contents, may
be cited as the ‘‘National Health Insurance Act’’.
TABLE OF CONTENTS
Secs. 2–5. Declaration of purpose.
TITLE I—BENEFITS AND ELIGIBILITY
Sec. 101. Classes of personal health services.
Sec. 102. Availability of benefits.
Sec. 103. How benefits obtained; free choice by patient.
Sec. 104. Eligibility for benefits.
Sec. 105. Provision of benefits for noninsured needy and other individuals.
TITLE II—PARTICIPATION OF PHYSICIANS, DENTISTS, NURSES,
HOSPITALS, AND OTHERS
Sec. 201. Physicians and dentists; specialists.
Sec. 202. Nurses.
Sec. 203. Hospitals.
Sec. 204. Auxiliary services.
Sec. 205. Agreements with individual practitioners, hospitals, and others.
Sec. 206. Agreements with voluntary health insurance and other organizations.
Sec. 207. Provisions common to all agreements.
Sec. 208. Methods of payments for services.
Sec. 209. Amount of payments for services.
Sec. 210. Professional rights and responsibilities.
TITLE III—LOCAL ADMINISTRATION
Sec. 301. Decentralization of administration.
Sec. 302. Local administrative committee or officer.
Sec. 303. Local area committees.
Sec. 304. Local professional committees.
Sec. 305. Methods of administration.
TITLE IV—STATE ADMINISTRATION
Sec. 401. Declaration of policy.
Sec. 402. State plan of operations.
TITLE V—NATIONAL HEALTH INSURANCE BOARD; NATIONAL AD-
VISORY MEDICAL POLICY COUNCIL; GENERAL ADMINISTRATIVE
PROVISIONS
Sec. 501. National Health Insurance Board.
Sec. 502. Advisory Council.
Sec. 503. Studies, recommendations, and reports.
Sec. 504. Nondisclosure of information.
Sec. 505. Prohibition against discrimination.
TITLE VI—ELIGIBILITY DETERMINATIONS, COMPLAINTS,
HEARINGS, AND JUDICIAL REVIEW
Sec. 601. Determinations as to eligibility for benefits.
Sec. 602. Complaints of eligible individuals and of persons furnishing benefits.
TITLE VII—APPLICATION OF ACT TO INDIVIDUALS COVERED
UNDER MEDICARE PROGRAM
Sec. 701. Eligibility; benefits available.
Sec. 702. Study and report.
TITLE VIII—FISCAL PROVISIONS
Sec. 801. Personal health services account.
Sec. 802. Allotment of funds.
Sec. 803. Grants-in-aid for training and education.
TITLE IX—MISCELLANEOUS PROVISIONS
Sec. 901. Definitions.
Sec. 902. Effective date.
TITLE X—VALUE ADDED TAX AND NATIONAL HEALTH CARE
TRUST FUND
Sec. 1001. Imposition of value added tax.
Sec. 1002. Revenue from value added tax to fund National Health Care Trust
Fund.
TITLE XI—STUDY AND DEVELOPMENT OF COST CONTROL
MECHANISMS
Sec. 1101. Development of cost control mechanisms.
FINDINGS AND DECLARATION OF PURPOSE
SEC. 2. (a) The Congress finds that—
(1) the health of the Nation’s people is the
foundation of our Nation’s strength, productivity,
and wealth;
(2) the assurance of adequate medical care to
all of our people is essential to the general welfare
and to the Nation’s security;
(3) since the tremendous advances in medical
science in recent years have necessarily meant great
advances in the cost of health services, our archaic
system of paying for medical care—based on public
and private charity for the poor, on unpredictable
and often unbearable costs to the otherwise self-sup-
porting, and on disproportionate charges for the
well-to-do—has resulted in the following conditions:
(A) the inability of the vast majority of our
people to meet the shattering cost of serious or
chronic illness;
(B) the inability of most of our people to
benefit from modern preventive medicine; and
(C) wholly inadequate provision for the
health needs of our farm families and agricul-
tural workers;
(4) the conditions described in the preceding
paragraph cannot effectively be remedied under the
present system of payment for medical care, or
under any voluntary insurance system; and
(5) a medical dole as an answer to this problem
is repugnant to the American people and would cer-
tainly result in a system of state medicine, paid for
from tax funds and rendered by regimented doctors.
(b) The Congress declares the purposes of this Act
to be to provide a sound economic foundation for our free
system of medicine and to correct the maldistribution of
health personnel and facilities by establishing a system of
prepaid personal health insurance on the principle of social
insurance.
SEC. 3. In establishing a system of national health
insurance, it is the policy of this Act that those persons
and their dependents who are insured under the provisions
of the Act shall be assured full freedom to choose their
physicians and to change their choice as they may desire;
that physicians and other professions furnishing services
in accordance with the provisions of this Act shall be as-
sured full freedom in the practice of their professions, in-
cluding the right to accept or reject patients except as this
right may be restricted by their own professional ethics
or by the laws of the several States; and that the adminis-
tration of this Act shall be based upon the American prin-
ciple of decentralization.
SEC. 4. In carrying out these policies, it is the inten-
tion of Congress that the major administrative responsibil-
ities be placed in the hands of local bodies representing
both those who pay for and receive services and those who
render services, and operating within the framework of
plans made by the several States, and approved by the
Federal agency; that the National Health Care Trust
Fund created by this Act shall be allotted equitably among
the several States and by the States to their local areas;
that voluntary as well as governmental organizations shall
be recognized and utilized; and that all eligible individuals
and their dependents as specified in this Act shall be enti-
tled to its benefits without discrimination because of race,
color, or creed.
TITLE I—BENEFITS AND ELIGIBILITY
CLASSES OF PERSONAL HEALTH SERVICES
SEC. 101. (a) The personal health services to be made
available as benefits to eligible individuals as provided in
this title are medical services, dental services, podiatric
services, home-nursing services, hospital services, and aux-
iliary services. Each class of services shall be provided by
persons (including individuals, partnerships, corporations,
associations, consumer cooperatives, and other organiza-
tions) who are authorized by applicable State law, and who
are qualified under title II of this Act, to do so.
(b) Medical services consist of (1) general medical
services such as can be rendered by a physician engaged
in the general or family practice of medicine, including
preventive, diagnostic, and therapeutic care and periodic
medical examinations; and (2) specialist services rendered
by a physician who is a specialist in the class of services
rendered, as defined in section 201 of this Act. Such
services may be rendered at the office, home, hospital,
or elsewhere, as necessary.
(c) Dental services consist of (1) general dental serv-
ices rendered by a dentist engaged in the general practice
of dentistry, including preventive, diagnostic, and thera-
peutic care, and periodic dental examinations; and (2) spe-
cialist services rendered by a dentist who is a specialist
in the class of services rendered, as defined in section 201
of this Act. Such services may be rendered at the office,
home, hospital, or elsewhere, as necessary.
(d) Podiatric services consist of those professional
services of a podiatrist who is legally authorized to per-
form such services in the State in which he practices.
(e) Home-nursing services consist of nursing care of
the sick rendered in the home by a registered professional
nurse or a qualified practical nurse.
(f) Hospital services consist of hospitalization, includ-
ing necessary nursing services, and such physician, labora-
tory, ambulance, and other services in connection with
hospitalization as the National Health Insurance Board
(hereinafter in this Act referred to as the ‘‘Board’’), after
consultation with the National Advisory Medical Policy
Council (hereinafter in this Act referred to as the ‘‘Advi-
sory Council’’), by regulation designates as essential to
good hospital care, for a maximum of sixty days in any
benefit year; but hospital services shall not include hos-
pitalization in a mental disease hospital or institution, or
hospitalization for any day more than thirty days following
the diagnosis of a psychosis. Whenever the Board, after
consultation with the Advisory Council, finds that moneys
in the account (established by section 701) are adequate
and that facilities are available, it may by regulation in-
crease the maximum days of hospitalization in any benefit
year.
(g) Auxiliary services consist of such chemical, bac-
teriological, pathological, diagnostic X-ray and related lab-
oratory services; X-ray, radium, and related therapy; phys-
iotherapy; services of optometrists; and prescribed drugs
which are unusually expensive, special appliances, and eye-
glasses; as the Board, after consultation with the Advisory
Council, by regulation designates as auxiliary services on
the basis of its finding that their provision under this Act
is practicable and is essential to good health care.
AVAILABILITY OF BENEFITS
SEC. 102. (a) Medical services, hospital services, and,
except as otherwise provided in subsection (b) of this sec-
tion, all other personal health services specified in section
101 shall be made available (subject to section 701) as
benefits to eligible individuals in all health-service areas
within the United States as rapidly and as completely as
possible having regard for the availability of the profes-
sional and technical personnel and the hospital and other
facilities needed to provide such services. To this end the
resources and needs of each State shall be surveyed and
a program developed in each State to assure the maximum
participation and use of health personnel and facilities in
the provision of benefits, and to encourage improvement
in the number and distribution of such personnel and fa-
cilities throughout the State. Additional surveys shall be
undertaken as required, and the program in the State
from time to time modified on the basis thereof.
(b) If the Board, after consultation with the Advisory
Council, finds that the personnel or facilities or funds that
are or can be made available are inadequate to insure the
provision of all services included as dental, home-nursing,
or auxiliary services under section 101 of this Act, it may
by regulation limit for a specified period the services which
may be provided as benefits, or modify the extent to which,
or the circumstances under which, they will be provided
to eligible individuals. Any such restriction or limitation
shall be reduced or withdrawn as rapidly as may be prac-
ticable; and, in the case of dental services, priority in the
reduction or withdrawal of any such restriction or limita-
tion shall be given to children.
(c) The Board shall have the duty of studying and
making recommendations as to needed services and facili-
ties for the care of the chronic sick afflicted with physical
ailments, and for the care of individuals afflicted with
mental or nervous diseases, and as to needed provisions
for the prevention of chronic physical diseases and of men-
tal or nervous diseases; and of making reports from time
to time, with recommendations as to legislation, but the
first such report shall be made not later than two years
after benefits under this Act first become available.
HOW BENEFITS OBTAINED: FREE CHOICE BY PATIENT
SEC. 103. Every individual eligible for personal
health services available under this Act may freely select
the physician, dentist, podiatrist, nurse, medical group,
hospital, or other person of his choice to render such serv-
ices, and may change such selection if the practitioner,
medical group, hospital, or other person has agreed under
title II of this Act to furnish the class of services required
and consents to furnish such services to the individual.
General medical, dental, and podiatric services may be ob-
tained by request made by the individual directly to the
practitioner of the individual’s choice. Specialist, home-
nursing, hospital, and auxiliary services shall be obtained
from the specialist, nurse, hospital, or other person of the
individual’s choice, whenever the practitioner from whom
he is receiving medical or dental services as benefits under
this Act refers him for specialist, home-nursing, hospital,
or auxiliary services upon determining that such services
are required in the proper care of his particular case; or
whenever, upon request of the individual, an administra-
tive medical officer, upon a like determination, refers him
for such services. The Board, by regulation, shall dispense
with the necessity of referral in cases of emergency, and
may dispense with the necessity of referral under specified
circumstances or as respects specified classes of services,
or both, if it finds, after consultation with the Advisory
Council, that such action will be conducive to the provision
of a more adequate amount and quality of health care and
will not unreasonably increase the expenditures from the
account for such services.
ELIGIBILITY FOR BENEFITS
SEC. 104. (a) Subject to section 701, every individual
shall be eligible for benefits under this Act throughout any
benefit year if—
(1) he has received (or, in the case of income
from self-employment, has accrued)—
(A) not less than $2,000 in wages during
the first four of the last six calendar quarters
preceding the beginning of the benefit year; or
(B) not less than $1,500 in wages in each
of six calendar quarters during the first twelve
of the last fourteen calendar quarters preceding
the beginning of the benefit year (not counting
as one of such fourteen calendar quarters any
quarter in any part of which the individual was
under a total disability which continued for six
months or more);
(2) he is entitled, for the first month in the
benefit year, to a benefit under title II of the Social
Security Act or to an annuity under subchapter III
(relating to civil service retirement) of chapter 83
of title 5, United States Code; or
(3) he is on the first day of the benefit year a
dependent of an individual who is eligible under
paragraph (1) or paragraph (2).
(b) Subject to section 701, every individual, not eligi-
ble therefor under subsection (a), shall be eligible for bene-
fits under this Act during the remainder of a benefit year,
beginning with—
(1) the first day of any calendar quarter in
such benefit year, if he has received (or, in the case
of income from self-employment, has accrued) not
less than $150 in wages during the first four of the
last six calendar quarters preceding the beginning of
such calendar quarter;
(2) the first day of the first month in such ben-
efit year for which he is entitled to a benefit or an-
nuity referred to in subsection (a)(2); or
(3) the first day in such benefit year on which
he is or becomes a dependent of an individual who
is eligible for benefits under subsection (a) (1) or (2)
under paragraph (1) or (2) of this subsection.
(c) No individual shall be deemed eligible for any per-
sonal health services as a benefit under this Act which
are required by reason of any injury, disease, or disability
on account of which any medical, dental, home-nursing,
hospital, or auxiliary service is being received, or upon ap-
plication therefor would be received, under a workmen’s
compensation law of the United States or of any State,
unless equitable reimbursements to the fund for the provi-
sion of such services as benefits have been made or as-
sured under section 105 of this Act. In any case in which
an individual receives any personal health service as a ben-
efit under this Act with respect to any such injury, dis-
ease, or disability, for which no reimbursement to the fund
has been made or assured, the United States shall to the
extent permitted by State law be subrogated to all rights
of such individual, or of the person who furnished such
service, to be paid or reimbursed, pursuant to such work-
men’s compensation law, for the cost of furnishing such
service.
PROVISION OF BENEFITS FOR NONINSURED NEEDY AND
OTHER INDIVIDUALS
SEC. 105. (a) Subject to section 701, any or all bene-
fits provided under this Act to individuals eligible for such
benefits may be furnished to individuals (including the
needy) not otherwise eligible therefor, for any period for
which equitable reimbursements to the account on behalf
of such needy or other individuals have been made, or for
which reasonable assurance of such reimbursements have
been given, by public agencies of the United States, the
several States, or any of them or of their political subdivi-
sions, such reimbursements to be in accordance with
agreements and working arrangements negotiated with
such public agencies. Services furnished to such needy or
other individuals as benefits shall be of the same quality,
be furnished by the same methods, and be paid for
through the same arrangements, as services furnished to
individuals eligible for benefits under this Act.
(b) Federal grants to States under title XIX, and
part A of title IV, of the Social Security Act, and Federal
grants to States for aid or assistance under other provi-
sions of such Act, shall be available to the States for provi-
sion of personal-health services for noninsured needy indi-
viduals in accordance with the provisions of subsection (a)
of this section.
TITLE II—PARTICIPATION OF PHYSICIANS,
DENTISTS, NURSES, HOSPITALS, AND OTHERS
PHYSICIANS AND DENTISTS; SPECIALISTS
SEC. 201. Any individual who is a physician, dentist,
or podiatrist legally authorized in a State to render any
services included as general medical, dental, or podiatric
services shall be deemed qualified to render such services
in that State as benefits under this Act. Any such individ-
ual who is found to possess skill and experience of a degree
and kind sufficient to meet standards established for a
class of specialist services shall be deemed qualified to re-
ceive compensation for specialist services of such class as
benefits under this Act. The Board, after consultation
with the Advisory Council, shall establish standards as to
the special skills and experience required to qualify an in-
dividual to render each such class of specialist services as
benefits under this Act, and to receive compensation for
such specialist services. In establishing such standards
and in determining whether individuals qualify there-
under, standards and certifications developed by profes-
sional agencies shall be utilized as far as is consistent with
the purposes of this Act, and regard shall be had for the
varying needs and the available resources in professional
personnel of the States and of local health-service areas.
NURSES
SEC. 202. Any individual shall be deemed qualified
to render home-nursing services in a State as benefits
under this title if such individual is (a) a professional
nurse registered in such State, or (b) a practical nurse
AUXILIARY SERVICES
SEC. 204. Any person (as defined in section 901(1))
who is qualified under State standards or requirements
to furnish a class of services included as auxiliary services,
or, in the absence of State standards or requirements, is
found to be qualified to furnish a class of such services
under standards established for such class by the Board
after consultation with the Advisory Council, shall be
deemed qualified to furnish such class of auxiliary services
in that State as benefits under this Act.
AGREEMENTS WITH INDIVIDUAL PRACTITIONERS,
HOSPITALS, AND OTHERS
SEC. 205. Any individual (or, in the case of hospital
or auxiliary services, any person) qualified under this title
to furnish any class or classes of personal health services
as benefits may enter into an agreement with the State
agency which in accordance with title IV has assumed re-
sponsibility for the administration in the State of benefits
under this Act (hereinafter in this Act referred to as the
‘‘State agency’’), to furnish such class or classes of serv-
ices as benefits to individuals eligible therefor under this
Act.
AGREEMENTS WITH VOLUNTARY HEALTH INSURANCE
AND OTHER ORGANIZATIONS
SEC. 206. (a) In the provision of personal health
services, it shall be the policy to utilize individuals or orga-
nizations qualified under this title to render such services,
including (1) any organized group of individuals, (2) any
partnership, association, or consumer cooperative, (3) any
hospital or any hospital and its staff, or (4) any organiza-
tion operating a voluntary health-service insurance plan
or other voluntary health-service plan.
(b) The State agency is authorized to enter into an
agreement with any organization referred to in subsection
(a) for the provision of personal health services under this
Act. Any such organization, whether or not it enters into
an agreement with the State agency on its own behalf,
shall be permitted to act as agent for individuals or other
persons in negotiating or in carrying out agreements with
the State agency for rendering personal health services
under this Act.
(c) Any agreement under this section shall provide
that each class of personal health services will be furnished
only by individuals (or, in the case of hospital or auxiliary
benefits, by persons, as defined in section 901(1)) who are
qualified under this title to render such class of services
and each of whom has agreed or has authorized an agree-
ment to be made on his behalf with the State agency that
he will furnish such services in accordance with this Act
and with regulations prescribed thereunder. Each such in-
dividual or person shall be responsible, both to the State
agency and (in accordance with applicable State law) to
individuals eligible for personal health services as benefits,
for carrying out such agreement made by him or on his
behalf.
PROVISIONS COMMON TO ALL AGREEMENTS
SEC. 207. (a) Each agreement made under this title
shall specify the class or classes of services to be furnished
or provided pursuant to its terms, shall contain an under-
taking to comply with this Act and with regulations pre-
scribed thereunder, shall be made upon terms and condi-
tions consistent with the efficient and economical adminis-
tration of this Act, and shall continue in force for such
period and be terminable upon such notice as may be
agreed upon.
(b) No agreement under section 206, and no designa-
tion of an agent, shall for more than one year preclude
any individual or person qualified to furnish personal
health services from exercising such rights as he would
otherwise have under this title (1) to negotiate and enter
into an agreement directly with the State agency, or (2)
to designate another agent for such negotiation, or (3) to
participate in another agreement under section 206.
(c) No agreement made under this title shall confer
upon any individual or other person, or any group or other
organization, the right of furnishing or providing personal
health services as benefits, to the exclusion in whole or
in part of other individuals, persons, groups, or organiza-
tions qualified to furnish or provide such services.
(d) If the State agency after investigation finds that
an individual or other person under agreement to furnish
or provide personal health services as benefits is no longer
qualified to furnish or provide such services, or has com-
mitted a substantial breach of the agreement, it shall no-
tify such person of its findings, together with the reasons
therefor, and in the absence of a request for a hearing
by such person under title VI, or in the event of a final
decision sustaining its findings after any hearing and fur-
ther review provided under title VI, may terminate the
agreement and withdraw the person’s name from the list
published pursuant to title III. After an agreement has
been so terminated, no new agreement shall be entered
into with such person under this Act unless and until such
person gives reasonable assurances to the State agency of
his or its ability and willingness to discharge all obliga-
tions and responsibilities under a new agreement satisfac-
torily in accordance with its provisions.
METHODS OF PAYMENTS FOR SERVICES
SEC. 208. (a) Agreements for the furnishing of medi-
cal, dental, or podiatric services (other than specialist
services) as benefits under this Act shall provide for pay-
ment—
(1) on the basis of fees for services rendered as
benefits, according to a fee schedule;
(2) on a per capita basis, the amount being ac-
cording to the number of individuals eligible for ben-
efits who are on the practitioner’s list;
(3) on a salary basis, whole time or part time;
or
(4) on such combinations or modifications of
these bases, including separate provision for travel
and related expenses, as may be approved by the
State agency;
according in each health-service area as the majority of
the medical practitioners or of the dental practitioners, re-
spectively, under agreement to furnish such services shall
elect. Provision shall be made for another method or meth-
ods of payment (from among the methods listed in this
subsection) to those medical practitioners or to those den-
tal practitioners who do not elect the method of such ma-
jority, when it is found that such alternative method of
making payments contributes to carrying out the provi-
sions of section 305 of this Act or otherwise promotes the
efficient and economical provision of medical or dental
services in the area.
(b) Agreements for the furnishing of specialist serv-
ices as benefits under this Act may provide for payments
on the basis of fee for service, per case, per session, per
capita, on salary (whole time or part time), or other basis,
or combination thereof.
(c) Any of the methods of making payments from
among the methods listed in subsection (a) or subsection
(b) may be used in making payments to groups or practi-
tioners or organizations or other agencies which undertake
to provide specialist services as well as general medical or
general dental services.
(d) Agreements for the furnishing of hospital services
as benefits under this Act shall provide for payment on
the basis of the reasonable costs of hospitalization fur-
nished as benefits. The Board, after consultation with the
Advisory Council and with representatives of interested
hospital organizations, may by regulation prescribe maxi-
mum rates for hospitalization furnished as benefits under
this Act, and such maximum rates may be varied accord-
ing to classes of localities or types of service. Payments
to hospitals shall be based on the least expensive multiple-
bed accommodations available in the hospital unless the
patient’s condition makes the use of private accommoda-
tions essential for his proper medical care. An agreement
made for furnishing such services shall not affect the right
of the hospital or other person with whom the agreement
is made to require payments from patients with respect
to the additional cost of more expensive facilities occupied
at the request of the patient, or with respect to services
not included as benefits under this Act.
(e) Agreements for the furnishing of home-nursing
services or auxiliary services as benefits under this Act
shall provide for payment in accordance with such meth-
ods as the State agency may approve from among those
set forth in regulations prescribed pursuant to this Act.
(f) In any health-service area where agreements for
the furnishing of general medical or general dental serv-
ices provide for payment only on a per capita basis, the
per capita payments with respect to those individuals re-
siding in the area who have failed to select a practitioner
or other person to furnish such services to them shall be
made on a pro rata basis among the practitioners and
other persons under agreement to furnish such services
in the area.
AMOUNT OF PAYMENTS FOR SERVICES
SEC. 209. (a) Rates or amounts of payment for par-
ticular services or classes of services furnished as benefits
under this Act shall be adapted to take account of relevant
regional, State, or local conditions and practices. In arriv-
ing at the payments to be made for services of general
medical and dental practitioners, specialists, professional
and practical nurses, or other practitioners, regard shall
be had for the annual income or its equivalent which the
payments will provide, and consideration shall be given to
degree of specialization, and to the skill, experience, and
responsibility involved in rendering the services. Such pay-
ments, together with the other terms and conditions of the
agreements made under this title, shall be adequate to
provide professional and financial incentives to practition-
ers to advance in their professions and to practice in local-
ities where their services are most needed, to encourage
high standards in the quality of services furnished, to give
assistance in their use of opportunities for postgraduate
study, and to allow for adequate vacation.
(b) The rates and amounts of payments fixed under
the different methods of payments specified in subsections
(a), (b), (c), and (e) of section 208, and the methods of
making payments, shall assure reasonably equivalent
awards for practitioners selecting different methods of
payment, in consideration of the value of the services they
render.
(c) Maximum limits upon the number of eligible indi-
viduals with respect to whom any person may undertake
to render services in any local health-service area may be
fixed by the local administrative committee or local admin-
istrative officer of that health-service area only on the
basis of a recommendation of the professional committee
in that area that such limitation is necessary to maintain
high standards in the quality of medical, dental, or other
services furnished as benefits. Any such limits shall take
account of professional needs and practices and shall pro-
vide suitable exceptions for emergency and temporary situ-
ations.
(d) The making of an agreement under section 206
with a group or other organization shall not operate to
increase the payments to be made pursuant to any such
agreement over the amounts which, in the absence of such
group or organization would be payable for the same serv-
ices pursuant to agreements made under section 205 di-
rectly with the person or persons who furnish the services.
PROFESSIONAL RIGHTS AND RESPONSIBILITIES
SEC. 210. (a) Any person who enters into an agree-
ment under this title may terminate such agreement after
reasonable notice and after suitable arrangements are
made to fulfill professional obligations to eligible individ-
uals.
(b) Every physician, dentist, or nurse agreeing to
render services as benefits under this Act shall be free to
practice his profession in the locality of his own choosing,
consistent with the requirements of the laws of the States.
(c) Every physician, dentist, nurse, hospital, or other
person entering into an agreement under this title shall
be free to the extent consistent with applicable State law
and customary professional ethics to accept or reject as
a patient any individual requesting his services.
(d) No supervision or control over the details of ad-
ministration or operation, or over the selection, tenure, or
compensation of personnel, shall be exercised under the
authority of this Act over any hospital which has agreed
to furnish personal health services as benefits.
TITLE III—LOCAL ADMINISTRATION
DECENTRALIZATION OF ADMINISTRATION
SEC. 301. In order that personal health-service bene-
fits may be made available promptly and in a manner best
adapted to local practices, conditions, and needs, respon-
sibility for administration of the benefits provided under
this Act in the several local health-service areas shall be
decentralized as fully as practicable to local administrative
committees or local administrative officers, acting with the
advice and assistance, as provided in this title, of local
professional committees and, in the case of local adminis-
trative officers, the advice and assistance of local area
committees. The health-service areas of a State shall be
those so designated in the State plan of operations.
LOCAL ADMINISTRATIVE COMMITTEE OR OFFICER
SEC. 302. The local administrative agency for each
local health-service area may, as determined by the State,
be either—
(1) a local administrative committee established
in accordance with section 303, which shall act
through a local executive officer; or
(2) a local administrative officer, who shall act
with the advice and assistance of a local advisory
committee established in accordance with section
303.
The local administrative committee or officer, with the ad-
vice and assistance of such local professional committees
as may from time to time be established, shall arrange
for the furnishing of personal health-service benefits to eli-
gible individuals in the area and to that end shall—
(a) publish, and make readily available to eligi-
ble individuals in the area, lists of the names of all
persons who have agreed to furnish personal health
services in the area, together with the class or class-
es of services which each has undertaken to furnish;
(b) disseminate pertinent information concern-
ing the rights and privileges under this Act of eligi-
ble individuals and of persons qualified to furnish
personal health services as benefits;
(c) maintain effective relationships with physi-
cians, dentists, nurses, hospitals, and other persons
who have entered into agreements to furnish per-
sonal health services in the area, in order to facili-
tate the furnishing of such services in accordance
with such agreements, to assure full and prompt
payment to such persons for services so furnished,
and to enlist their full cooperation in the administra-
tion of benefits under this Act in the area;
(d) receive and, to the extent possible in the
local area, adjust any complaints which may be
made concerning the administration of benefits
under this Act in the area;
(e) perform such other duties (including the
making of payments to persons furnishing personal
health services in the area) as may be assigned by
the State agency; and
(f) take or initiate such other administrative ac-
tion as he finds will best carry out, within the area,
the provisions of this Act, and best effectuate its
purposes.
LOCAL AREA COMMITTEES
SEC. 303. (a) A local area committee shall be estab-
lished in each health-service area. If designated by the
State as a local administrative committee, the local area
committee shall perform the functions specified in section
302 and shall formulate policies for the administration of
benefits under this Act in the area. If designated as an
advisory committee, it shall advise and assist in the per-
formance of such functions and the formulation of such
policies. The committee, whether administrative or advi-
sory, shall participate in the solution of problems affecting
the administration of such benefits, shall promote impar-
tiality and freedom from political influence in such admin-
istration, and shall perform related functions to the end
that administration in the area may be responsive to the
wishes and needs of persons furnishing and receiving bene-
fits in the area, be adapted to local practices and re-
sources, and provide adequate and high quality personal
health services to all eligible individuals.
(b) Each local area committee shall consist of not less
than eight nor more than sixteen members. The members
shall be so selected that a majority of the committee shall
be representative of the interests of individuals in the area
who are eligible for benefits, and the remaining mem-
bers shall be chosen from the several professions, hos-
pitals, and other organizations in the area by whom such
benefits will be provided.
(c) The local area committee shall meet as often as
may be necessary, and whenever one-third or more of the
members request a meeting; in the case of a local adminis-
trative committee, not less frequently than once each
month, and in the case of a local advisory committee, not
less frequently than once in each quarter of the year. At
least one meeting of the committee each year shall be open
to the public, notice of which shall be published and at
which any person in the area may participate. At least
once each year there shall be a statewide meeting of local
administrative officers and representatives of local admin-
istrative committees. At least once in each year there shall
be a statewide meeting of representatives of all local advi-
sory committees in the State, and any reports or rec-
ommendations made at such meeting shall on the request
of such meeting be transmitted through the State agency
to the Board.
LOCAL PROFESSIONAL COMMITTEES
SEC. 304. Local committees representative of the per-
sons furnishing personal health services in the area shall
be established in each health-service area to assist the
local administrative committee and its executive officer, or
the local administrative officer and the local advisory com-
mittee, as the case may be, in the preservation of the cus-
tomary freedom and responsibility (under applicable State
law) of practitioners in the exercise of professional judg-
ment as to the care of patients, and in the solution of
technical problems concerning the participation of profes-
sional personnel, hospitals, and other qualified persons in
the provision of personal health services as benefits, and
to advise the local administrative or executive officer and
the local area committee regarding matters of professional
practice or conduct arising in connection with the perform-
ance of agreements for the provision of such services. Such
local committees shall meet on call of the local administra-
tive committee or officer, as the case may be, or upon their
own motion. The members of any such local professional
committee may be professional members of the local area
committee or other professional persons or both.
METHODS OF ADMINISTRATION
SEC. 305. (a) In each health-service area the methods
of administration shall be such as to—
(1) insure the prompt and efficient care of indi-
viduals entitled to personal health services as bene-
fits;
(2) promote personal relationships between phy-
sician and patients;
(3) promote coordination among and between
general practitioners, specialists, those who furnish
auxiliary services, nurses, and hospitals, in the fur-
nishing of services under this Act, between them and
public-health centers and agencies, and educational
service, research, and other related agencies or insti-
tutions, and between preventive, diagnostic, and cu-
rative services, public and private;
(4) aid in the prevention of disease, disability,
and premature death;
(5) encourage improvement in the number and
distribution of professional personnel and facilities;
and
(6) insure the provision of adequate service with
the greatest economy consistent with high standards
of quality.
(b) Local administrative officers shall be appointed
by the State agency or the head thereof, in accordance
with the merit system provided for in the State plan of
operations; local administrative committees shall be ap-
pointed by such agency or the head thereof, from individ-
uals residing in the respective health-service areas, and the
executive officers of such committees shall be appointed
by the committees in accordance with the merit system;
the local health-service areas shall be those so designated
in such plan; and members of local advisory committees
and of local professional committees shall be selected in
accordance with methods set forth in such plan.
(c) In exercising their functions and discharging their
responsibilities under this Act, local administrative officers
and communities, local advisory committees, and local pro-
fessional committees shall observe the provisions of this
Act, and of regulations prescribed thereunder, and of any
regulations, standards, and procedures prescribed by the
State agency.
TITLE IV—STATE ADMINISTRATION
DECLARATION OF POLICY
SEC. 401. It is the intent of Congress that the bene-
fits provided under this Act be administered wherever pos-
sible by the several States, in accordance with plans of
operations submitted and approved as provided in this
title, and in each State insofar as feasible by the same
State agency which administers, or supervises the admin-
istration of, the State’s general public health and maternal
and child health programs.
STATE PLAN OF OPERATIONS
SEC. 402. (a) Any State desiring to assume respon-
sibility for the administration in the State of the personal
health-service benefits provided under this Act to all indi-
viduals in the State who are eligible for such benefits, may
do so for the period beginning October 1, 1998 (when ben-
efits first become available under this Act), or for the pe-
riod beginning October 1 of any succeeding year, if it has
undertaken, through its legislature, to administer such
benefits in accordance with the provisions of this Act and
with the provisions of regulations and standards pre-
scribed thereunder, and, at least twelve months in ad-
vance, has submitted and had approved a State plan of
operations which—
(1) designates as the sole agency for the state-
wide administration of benefits under this Act a sin-
gle State agency duly authorized under the law of
the State to administer such benefits within the
State in accordance with the provisions of this Act,
the provisions of regulations and standards pre-
scribed thereunder, and the provisions of the State
plan;
(2) provides for the designation of a State advi-
sory committee which shall include members who are
familiar with the needs for personal health services
in urban and rural areas, and who are representative
of the interests of individuals in the State who are
eligible for benefits, such members to constitute a
majority, and members chosen from the several pro-
fessions, hospitals, and other organizations in the
State by whom such benefits will be provided, to ad-
vise the State agency in carrying out the administra-
tion of such benefits in the State;
(3) provides for the decentralized administra-
tion of this Act in the State in accordance with title
III for the designation of local health-service areas,
and for such methods of selecting the members of
local advisory committees and of local professional
committees as are calculated to insure representa-
tion of the nature set forth in sections 303 and 304,
respectively;
(4) provides such methods of administration, in-
cluding methods relating to the establishment and
maintenance of personnel standards on a merit basis
(except that the Board shall exercise no authority
with respect to the selection, tenure of office, or
compensation of any individual employed in accord-
ance with such methods), as are found by the Board
to be necessary for the proper and efficient adminis-
tration of such benefits in the State;
(5) provides for the making of surveys of the
resources and needs of the State, in accordance with
section 102(a), and sets forth a program for the ad-
ministration of such benefits in the State which
gives reasonable assurance (A) that maximum use
will be made of all available health personnel and fa-
cilities desiring to participate in the provision of ben-
efits to eligible individuals, (B) that funds allotted to
the State for the several classes of benefits will be
allocated in such manner as to give reasonable as-
surance of the availability of services in all health-
service areas in the State, and (C) that any mal-
distribution or other inadequacies in the health per-
sonnel or facilities available for such purpose, or in
the quality of the services rendered, will be progres-
sively improved as rapidly as may be practicable;
(6) provides that the State agency will make
such reports in such form and containing such infor-
mation as the Board may from time to time reason-
ably require, and give the Board, upon demand, ac-
cess to the records upon which such information is
based;
(7) provides that all Federal funds paid to the
State agency for purposes of carrying out this Act
in the State shall be properly safeguarded and ex-
pended solely for the purposes for which paid, and
provides for the repayment by the State to the Unit-
ed States of any such funds lost by the State agency
or diverted from the purposes for which paid; and
(8) provides for cooperation, including where
necessary entering into working agreements (with
any appropriate transfer of funds), with other public
agencies of the State or of its political subdivisions
concerned with programs related to the purposes of
this Act, and with appropriate agencies of other
States or of the United States administering this
Act, or benefits under this Act, in other States.
(b) The Board shall approve any State plan and any
modification thereof submitted by the State which it finds
complies with the provisions of subsection (a). No change
in a State plan shall be required within one year after
initial approval thereof, or within one year after any
change thereafter required therein, by reason of any
change in the regulations or standards prescribed pursu-
ant to this Act, except with the consent of the State or
in accordance with further action by Congress.
(c) In the event of its disapproval of any plan or any
modification therein submitted by a State pursuant to this
title, the Board shall notify the State of such disapproval
and shall, upon request of the State, afford it reasonable
notice and opportunity for a hearing on such disapproval.
(d) If a State has not prior to October 1, 1998, sub-
mitted and had approved a plan of operations, the Board
shall notify the Governor of the State that the Board will
be required to administer this Act in the State, commenc-
ing October 1, 1998. The Board shall provide for the pub-
lication of such notice in at least two newspapers of gen-
eral circulation in the State. If within sixty days after such
notification to the Governor the State has not submitted
an approvable plan, the Board shall continue such admin-
istration until one year after the submission and approval
of a plan of operations in accordance with this section.
The Board may waive the requirement that a State plan
must be submitted and approved one year prior to com-
mencement of State administration if it is satisfied in a
particular case that the substitution of a shorter pre-
paratory period will not prejudice the interests of eligible
individuals in the State.
(e) Whenever the Board, after reasonable notice and
opportunity for hearing to the State, finds that the State,
having submitted and had approved a plan of operations
under this title—
(1) is not complying substantially with the pro-
visions of such plan, or with the provisions of this
Act or any regulations or standards prescribed
thereunder, or
(2) has withdrawn its plan or failed to change
it when and as required by a change in this Act or
in regulations prescribed thereunder,
the Board shall notify the Governor of the State of such
findings, together with its reasons therefor and a state-
ment concerning the effect of such findings under this Act,
and shall provide for the publication of such notice in at
least two newspapers of general circulation in the State.
If within sixty days following such a notice the State has
not taken appropriate action to bring its plan or its admin-
istration thereof into conformity with this Act and regula-
tions and standards thereunder, the Board shall imme-
diately assume responsibility for the administration of this
Act in the State and shall administer the same in such
State for so long thereafter as the State fails to give rea-
sonable assurances of substantial compliance or fails to
submit an approvable plan, as the case may be.
(f) In any State in which the Board has assumed re-
sponsibility for the administration of benefits under this
Act as provided in subsections (d) and (e) of this section,
the Board shall have and discharge all authority and du-
ties, in accordance with the provisions of this Act, which
it finds necessary for that purpose, and the term ‘‘State
agency’’ wherever used in title II or title III of this Act
shall be deemed to refer to the Board.
(g) Nothing in this Act shall preclude any State or
any political subdivision thereof, whether or not the State
has assumed responsibility for the administration of bene-
fits under this Act, from furnishing, with funds available
from sources other than the account, any additional health
services to individuals who are eligible for benefits under
this Act or any or all health services to individuals who
are not so eligible.
TITLE 
V—NATIONAL 
HEALTH 
INSURANCE
BOARD; 
NATIONAL 
ADVISORY 
MEDICAL
POLICY COUNCIL; GENERAL ADMINISTRA-
TIVE PROVISIONS
NATIONAL HEALTH INSURANCE BOARD
SEC. 501. (a) There is hereby established in the De-
partment of Health and Human Services a National
Health Insurance Board, to be composed of five members,
three of whom shall be appointed by the President by and
with the advice and consent of the Senate, and the other
two of whom shall be the Surgeon General of the Public
Health Service and the Commissioner of Social Security.
During his term of membership on the Board, no ap-
pointed member shall engage in any other business, voca-
tion, or employment. At least one of the appointed mem-
bers shall be a doctor of medicine licensed to practice med-
icine or surgery in one of the States. Each appointed mem-
ber shall receive a salary at an annual rate of basic pay,
established by the President, which is not less than the
annual rate of basic pay for positions at level V of the
Executive Schedule and which is not greater than the an-
nual rate of basic pay for positions at level IV of the Exec-
utive Schedule, and shall hold office for a term of six
years, except that (1) any member appointed to fill a va-
cancy occurring prior to the expiration of the term for
which his predecessor was appointed shall be appointed
for the remainder of such term; and (2) the terms of office
of the members first taking office after the date of the
enactment of this Act shall expire, as designated by the
President at the time of appointment, one at the end of
two years, one at the end of four years, and one at the
end of six years, after the date of the enactment of this
Act. The President shall designate one of the appointed
members as the Chairman of the Board.
(b) All functions of the Board shall be administered
by the Board under the direction and supervision of the
Secretary of Health and Human Services. The board shall
perform such functions as it finds necessary to carry out
the provisions of this Act, and shall make all regulations
and standards specifically authorized to be made in this
Act and such other regulations not inconsistent with this
Act as may be necessary. The Board may delegate to any
of its members, officers, or employees, or with the ap-
proval of the Secretary to any other officer or employee
of the Department of Health and Human Services, such
of its powers or duties, except that of making regulations,
as it may consider necessary and proper to carry out the
provisions of this Act. The Board may also enter into
agreements for the furnishing or provision of personal
health services under this Act without regard to the provi-
sions of title 5, United States Code, pertaining to the ap-
pointment, status, or compensation of Federal employees,
or pertaining to contracts for personal services, and with-
out regard to section 3709 of the Revised Statutes (41
U.S.C. 5), and any person rendering services pursuant to
an agreement so made shall not by reason thereof be
deemed to be an employee of the United States.
(c) In administering the provisions of this Act, the
Board is authorized to utilize the services and facilities
of any executive department or other agency of the United
States in accordance with an agreement with the head
thereof. Payment for such services and facilities shall be
made in advance or by way of reimbursement, as may be
agreed upon with the head of the executive department
or other agency furnishing them.
(d) Personnel of the Board shall be appointed by the
Secretary upon recommendation of the Board. The Sec-
retary is authorized to detail to the Board, upon its re-
quest, any officer or employee of the Department of
Health and Human Services, and in his discretion to reim-
burse, from funds available for the administration of this
Act, the appropriation from which the salary or, in the
case of commissioned officers of the Public Health Service,
the pay and allowances of such officer or employee are
paid.
(e) Upon the request of any State agency administer-
ing a State plan of operations pursuant to title IV of this
Act, or upon the request of any State desiring to prepare
and submit a plan of operations, any officer or employee
of the Board (including any officer or employee detailed
to the Board pursuant to subsection (d)) may be detailed
by the Board to assist in the administration, or in the
preparation, of such State plan of operations. The funds
available for the Federal administration of this Act may,
in the discretion of the Secretary, be reimbursed from
funds allotted to the State pursuant to section 802 and
available for State administration, for the salary (or for
the pay and allowances) of any officer or employee so de-
tailed.
ADVISORY COUNCIL
SEC. 502. (a) There is hereby established a National
Advisory Medical Policy Council to consist of the Chair-
man of the Board, who shall serve as Chairman of the
Advisory Council ex officio, and sixteen members ap-
pointed by the Secretary of Health and Human Services.
At least eight of the sixteen appointed members shall be
individuals who are familiar with the need for personal
health services in urban or rural areas and who are rep-
resentative of the interests of individuals eligible for bene-
fits under this Act, and at least six of the members shall
be individuals who are outstanding in the medical or other
professions concerned with the provision of services pro-
vided as benefits under this Act and who are representa-
tive of the individuals, organizations, and other persons
by whom personal health services will be provided. Each
appointed member shall hold office for a term of four
years, except that any member appointed to fill a vacancy
occurring prior to the expiration of the term for which
his predecessor was appointed shall be appointed for the
remainder of that term, and the terms of the members
first taking office shall expire, as designated by the Sec-
retary at the time of appointment, four at the end of the
first year, four at the end of the second year, four at the
end of the third year, and four at the end of the fourth
year after the date of appointment. The Advisory Council
is authorized to appoint such special advisory technical or
professional committees as may be useful in carrying out
its functions, and the members of such committees may
be members of the Advisory Council, or other persons, or
both. Appointed Advisory Council members and members
of technical or professional committees, while serving on
business of the Council (inclusive of traveltime), shall re-
ceive compensation at rates fixed by the Secretary, but
not exceeding $200 per day, and shall be entitled to re-
ceive actual and necessary traveling expenses and per diem
in lieu of subsistence while so serving away from their
places of residence. The Advisory Council, its appointed
members, and its committees, shall be provided with such
secretarial, clerical, or other assistance as may be provided
by the Congress for carrying out their respective func-
tions. The Advisory Council shall meet as frequently as
the Board deems necessary, but not less than twice each
year. Upon request by six or more members, it shall be
the duty of the Chairman to call a meeting of the Council.
(b) The Advisory Council shall advise the Board with
reference to matters of general policy and administration
arising in connection with the making of regulations, the
establishment of professional standards, and the perform-
ance of its other duties under this Act.
(c) Section 14 of the Federal Advisory Committee Act
shall not apply to the Advisory Council.
STUDIES, RECOMMENDATIONS, AND REPORTS
SEC. 503. The Board shall have the duty of studying
and making recommendations as to the most effective
methods of providing health services, and as to legislation
and matters of administrative policy concerning health
and related subjects. At the beginning of each regular ses-
sion of Congress, it shall make a full report to Congress
of the administration of this Act, including a report with
regard to the adequacy of its financial provisions con-
tained in this Act and of appropriations made pursuant
thereto, the methods of allotment of funds among the
States, and related matters. Such report shall include a
record of consultations with the Advisory Council, rec-
ommendations of the Advisory Council, and comments
thereon.
NONDISCLOSURE OF INFORMATION
SEC. 504. Information concerning an individual, ob-
tained from him or from any physician, dentist, nurse, or
hospital, or from any other person pursuant to or as a
result of the administration of this Act, shall be held con-
fidential (except for statistical purposes) and shall not be
disclosed or be open to public inspection in any manner
revealing the identity of the individual or other person
from whom the information was obtained or to whom the
information pertains, except as may be necessary for the
proper administration of this Act or of other laws, State
or Federal. Any person who shall violate any provision of
this section shall be deemed guilty of a misdemeanor and,
upon conviction thereof, shall be punished by a fine not
exceeding $50,000 or by imprisonment not exceeding one
year, or both.
PROHIBITION AGAINST DISCRIMINATION
SEC. 505. In carrying out the provisions of this Act
there shall be no discrimination on account of race, creed,
or color. Personal health services shall be made available
as benefits to all eligible individuals, and all persons quali-
fied under title II to enter into agreements to furnish or
provide such services shall be permitted to do so.
TITLE 
VI—ELIGIBILITY 
DETERMINATIONS,
COMPLAINTS, HEARINGS, AND JUDICIAL
REVIEW
DETERMINATIONS AS TO ELIGIBILITY FOR BENEFITS
SEC. 601. (a) The Secretary of Health and Human
Services through such units of the Department of Health
and Human Services as he may determine, shall upon his
own initiative or upon application of any individual make
determinations as to the eligibility of individuals for bene-
fits under this Act. Whenever requested by any individual
determined by the Secretary not to be eligible for benefits
for any period, or by a dependent of any such individual,
the Secretary shall give such individual or such dependent
reasonable notice and opportunity for a hearing with re-
spect to such determination and on the basis of the evi-
dence adduced at the hearing shall affirm, modify, or re-
verse his determination.
(b) In carrying out his responsibility under this sec-
tion, the Secretary shall have all the powers and duties
conferred upon him under sections 205 and 206 of the
Social Security Act. Such powers and duties shall be sub-
ject to the same limitations and rights of judicial review
as are contained in section 205 of such Act. Eligibility
for benefits under this title based on entitlement to an
annuity under subchapter III (relating to civil service re-
tirement) of chapter 83 of title 5, United States Code,
shall be determined on the basis of certification by the
Office of Personnel Management.
(c) Nothing in title IV of this Act shall be deemed
to require or authorize any assumption by the State agen-
cy, designated in accordance with an approved State plan
of operations approved under such title, of any of the Sec-
retary’s responsibilities under this section, but the Sec-
retary may utilize existing facilities and services of any
such agency on the basis of mutual agreements with such
agency.
COMPLAINTS OF ELIGIBLE INDIVIDUALS AND OF
PERSONS FURNISHING BENEFITS
SEC. 602. (a) Any eligible individual aggrieved by
reason of his failure to receive any personal health-service
benefits to which he believes himself entitled, or dissatis-
fied with any service rendered him as a personal health-
service benefit, and any person who has entered into an
agreement to furnish services as personal health-service
benefits and who is aggrieved by the failure or alleged fail-
ure of a local or other administrative officer or a local
administrative committee to carry out the agreement in
accordance with its terms, may make a complaint to the
local administrative officer or local executive officer in the
area in which the action or inaction complained of oc-
curred, or to such other officer as may be provided in reg-
ulations. If the officer to whom such complaint is made
finds, after investigation, that the complaint is well found-
ed, he shall promptly take such steps as may be necessary