I 
108TH CONGRESS 
1ST SESSION 
H. R. 15
To provide a program of national health insurance, and for other purposes. 
IN THE HOUSE OF REPRESENTATIVES 
JANUARY 7, 2003
Mr. DINGELL introduced the following bill; which was referred to the Com-
mittee on Energy and 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,
SECTION. 1. SHORT TITLE; TABLE OF CONTENTS. 
(a) SHORT TITLE.—This Act may be cited as the 
‘‘National Health Insurance Act’’. 
(b) TABLE OF CONTENTS.—The table of contents of 
this Act is as follows:
Sec. 2. Findings and declaration of purpose. 
Sec. 3. Policies of Act. 
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. Use of Trust Fund.
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.
SEC. 2. FINDINGS AND DECLARATION OF PURPOSE. 
(a) FINDINGS.—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) PURPOSES.—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 mal-
distribution of health personnel and facilities by estab-
lishing a system of prepaid personal health insurance on 
the principle of social insurance.
SEC. 3. POLICIES OF ACT. 
(a) IN GENERAL.—In establishing a system of na-
tional health insurance, it is the policy of this Act that—
(1) those persons and their dependents who are 
insured under the provisions of the Act shall be as-
sured full freedom to choose their physicians and to 
change their choice as they may desire; 
(2) physicians and other professions furnishing 
services in accordance with the provisions of this Act 
shall be assured full freedom in the practice of their 
professions, including 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 
(3) the administration of this Act shall be based 
upon the American principle of decentralization. 
(b) ADMINISTRATIVE RESPONSIBILITIES.—In car-
rying out these policies, it is the intention of Congress that 
the major administrative responsibilities 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 sev-
eral 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 uti-
lized; and that all eligible individuals and their dependents 
as specified in this Act shall be entitled to its benefits 
without discrimination because of race, color, or creed. 
TITLE I—BENEFITS AND 
ELIGIBILITY 
SEC. 101. CLASSES OF PERSONAL HEALTH SERVICES. 
(a) PERSONAL HEALTH SERVICES.—
(1) IN GENERAL.—The personal health services 
to be made available as benefits to eligible individ-
uals as provided in this title are the following: 
(A) Medical services. 
(B) Dental services. 
(C) Podiatric services. 
(D) Home-nursing services. 
(E) Hospital services. 
(F) Auxiliary services. 
(2) PROVISION
OF
SERVICES.—Each class of 
services shall be provided by persons (including indi-
viduals, partnerships, corporations, associations, con-
sumer cooperatives, and other organizations) who 
are authorized by applicable State law, and who are 
qualified under title II, to do so. 
(b) MEDICAL SERVICES.—Medical services consist 
of—
(1) general medical services such as can be ren-
dered by a physician engaged in the general or fam-
ily practice of medicine, including preventive, diag-
nostic, and therapeutic care and periodic medical ex-
aminations; and 
(2) specialist services rendered by a physician 
who is a specialist in the class of services rendered, 
as defined in section 201. 
Such medical services may be rendered at the office, home, 
hospital, or elsewhere, as necessary. 
(c) DENTAL SERVICES.—Dental services consist of—
(1) general dental services rendered by a dentist 
engaged in the general practice of dentistry, includ-
ing preventive, diagnostic, and therapeutic care, and 
periodic dental examinations; and 
(2) specialist services rendered by a dentist who 
is a specialist in the class of services rendered, as 
defined in section 201. 
Such dental services may be rendered at the office, home, 
hospital, or elsewhere, as necessary. 
(d) PODIATRIC SERVICES.—Podiatric services consist 
of those professional services of a podiatrist who is legally 
authorized to perform such services in the State in which 
the podiatrist practices.
(e) HOME-NURSING SERVICES.—Home-nursing serv-
ices consist of nursing care of the sick rendered in the 
home by a registered professional nurse or a qualified 
practical nurse. 
(f) HOSPITAL SERVICES.—
(1) IN GENERAL.—Hospital services consist of 
hospitalization, including necessary nursing services, 
and such physician, laboratory, ambulance, and 
other services in connection with hospitalization as 
the National Health Insurance Board (in this Act 
referred to as the ‘‘Board’’), after consultation with 
the National Advisory Medical Policy Council (in 
this Act referred to as the ‘‘Advisory Council’’), by 
regulation designates as essential to good hospital 
care, for a maximum of 60 days in any benefit year. 
(2) EXCLUSION.—Hospital services shall not in-
clude hospitalization in a mental disease hospital or 
institution, or hospitalization for any day more than 
30 days following the diagnosis of a psychosis. 
(3) INCREASE
IN
MAXIMUM
NUMBER
OF 
DAYS.—Whenever the Board, after consultation with 
the Advisory Council, finds that moneys in the Na-
tional Health Care Trust Fund 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.—Auxiliary services consist 
of such—
(1) chemical, bacteriological, pathological, diag-
nostic X-ray and related laboratory services; 
(2) X-ray, radium, and related therapy; 
(3) physiotherapy; 
(4) services of optometrists; 
(5) prescribed drugs which are unusually expen-
sive; 
(6) special appliances; and 
(7) eyeglasses; 
as the Board, after consultation with the Advisory Coun-
cil, 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. 
SEC. 102. AVAILABILITY OF BENEFITS. 
(a) GENERAL AVAILABILITY.—
(1) IN
GENERAL.—Medical services, hospital 
services, and, except as otherwise provided in sub-
section (b), all other personal health services speci-
fied 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 professional and technical 
personnel and the hospital and other facilities need-
ed to provide such services. 
(2) SURVEYS OF RESOURCES AND NEEDS.—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 num-
ber and distribution of such personnel and facilities 
throughout the State. Additional surveys shall be 
undertaken as required, and the program in the 
State from time to time modified on the basis there-
of. 
(b) LIMITATION ON AVAILABILITY.—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 serv-
ices included as dental, home-nursing, or auxiliary services 
under section 101, it may by regulation limit for a speci-
fied 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 with-
drawn as rapidly as may be practicable. In the case of 
dental services, priority in the reduction or withdrawal of 
any such restriction or limitation shall be given to chil-
dren. 
(c) RECOMMENDATIONS.—The Board shall have the 
duty of—
(1) studying and making recommendations as 
to needed services and facilities for the care of the 
chronic sick afflicted with physical ailments, and for 
the care of individuals afflicted with mental or nerv-
ous diseases, and as to needed provisions for the 
prevention of chronic physical diseases and of mental 
or nervous diseases; and 
(2) making reports from time to time, with rec-
ommendations as to legislation, but the first such re-
port shall be made not later than two years after 
benefits under this Act first become available. 
SEC. 103. HOW BENEFITS OBTAINED: FREE CHOICE BY PA-
TIENT. 
(a) IN GENERAL.—Every individual eligible for per-
sonal health services available under this Act may freely 
select the physician, dentist, podiatrist, nurse, medical 
group, hospital, or other person of the individual’s choice 
to render such services, and may change such selection 
if the practitioner, medical group, hospital, or other person
has agreed under title II to furnish the class of services 
required and consents to furnish such services to the indi-
vidual. 
(b) PRACTITIONER
SERVICES.—General medical, 
dental, and podiatric services may be obtained by request 
made by the individual directly to the practitioner of the 
individual’s choice. 
(c) SPECIALTY SERVICES.—Specialist, home-nursing, 
hospital, and auxiliary services shall be obtained from the 
specialist, nurse, hospital, or other person of the individ-
ual’s choice, whenever the practitioner from whom the in-
dividual is receiving medical or dental services as benefits 
under this Act refers the individual for specialist, home-
nursing, hospital, or auxiliary services upon determining 
that such services are required in the proper care of the 
individual’s particular case; or whenever, upon request of 
the individual, an administrative medical officer, upon a 
like determination, refers the individual for such services. 
(d) WAIVER OF REFERRAL.—The Board, by regula-
tion, shall dispense with the necessity of referral in cases 
of emergency, and may dispense with the necessity of re-
ferral under specified circumstances or as respects speci-
fied classes of services, or both, if it finds, after consulta-
tion 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 National Health Care Trust 
Fund for such services. 
SEC. 104. ELIGIBILITY FOR BENEFITS. 
(a) IN GENERAL.—Subject to section 701, every indi-
vidual shall be eligible for benefits under this Act through-
out any benefit year if the individual—
(1) 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) is entitled, for the first month in the benefit 
year, to a benefit under title II of the Social Secu-
rity Act or to an annuity under subchapter III (re-
lating to civil service retirement) of chapter 83 of 
title 5, United States Code; or
(3) the individual is on the first day of the ben-
efit year a dependent of an individual who is eligible 
under paragraph (1) or paragraph (2). 
(b) ADDITIONAL ELIGIBILITY.—Subject to section 
701, every individual, not eligible therefor under sub-
section (a), shall be eligible for benefits 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 the individual has received (or, 
in the case of income from self-employment, has ac-
crued) 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 the individual is entitled to a ben-
efit or annuity referred to in subsection (a)(2); or 
(3) the first day in such benefit year on which 
the is or becomes a dependent of an individual who 
is eligible for benefits under subsection (a) (1) or (2) 
under paragraph (1) or (2). 
(c) COVERAGE UNDER WORKERS’ COMPENSATION.—
(1) NO
COVERAGE.—No individual shall be 
deemed eligible for any personal 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 appli-
cation therefor would be received, under a work-
men’s compensation law of the United States or of 
any State, unless equitable reimbursements to the 
National Health Care Trust Fund for the provision 
of such services as benefits have been made or as-
sured under section 105. 
(2) SUBROGATION.—In any case in which an 
individual receives any personal health service as a 
benefit under this Act with respect to any such in-
jury, disease, or disability, for which no reimburse-
ment to the National Health Care Trust 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 fur-
nished such service, to be paid or reimbursed, pursu-
ant to such workmen’s compensation law, for the 
cost of furnishing such service. 
SEC. 105. PROVISION OF BENEFITS FOR NONINSURED 
NEEDY AND OTHER INDIVIDUALS. 
(a) IN GENERAL.—Subject to section 701, any or all 
benefits 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 National 
Health Care Trust Fund on behalf of such needy or other 
individuals have been made, or for which reasonable assur-
ance of such reimbursements have been given, by public 
agencies of the United States, the several States, or any 
of them or of their political subdivisions, such reimburse-
ments to be in accordance with agreements and working 
arrangements negotiated with such public agencies. Serv-
ices furnished to such needy or other individuals as bene-
fits 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) AVAILABILITY
OF FEDERAL FUNDS.—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 provisions of such Act, 
shall be available to the States for provision of personal-
health services for noninsured needy individuals in accord-
ance with the provisions of subsection (a).
TITLE 
II—PARTICIPATION 
OF 
PHYSICIANS, 
DENTISTS, 
NURSES, 
HOSPITALS, 
AND 
OTHERS 
SEC. 201. PHYSICIANS AND DENTISTS; SPECIALISTS. 
(a) QUALIFICATIONS.—Any individual who is a physi-
cian, 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. 
(b) SPECIALISTS.—
(1) IN GENERAL.—Any such individual 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 receive compensation for specialist services of 
such class as benefits under this Act. 
(2) STANDARDS.—The Board, after consulta-
tion with the Advisory Council, shall establish stand-
ards as to the special skills and experience required 
to qualify an individual 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 thereunder, standards
and certifications developed by professional agencies 
shall be utilized as far as is consistent with the pur-
poses of this Act, and regard shall be had for the 
varying needs and the available resources in profes-
sional personnel of the States and of local health-
service areas. 
SEC. 202. NURSES. 
Any individual shall be deemed qualified to render 
home-nursing services in a State as benefits under this 
title if such individual is—
(1) a professional nurse registered in such 
State; or 
(2) a practical nurse—
(A) who is qualified as such under State 
standards or requirements, or, in the absence of 
State standards or requirements, is found to be 
qualified under standards established by the 
Board after consultation with the Advisory 
Council and with nursing agencies; and 
(B) who furnishes nursing care under the 
direction or supervision of the State health 
agency, the health agency of a political subdivi-
sion of the State, or an organization supplying 
and supervising the services of registered pro-
fessional nurses in the State.
SEC. 203. HOSPITALS. 
Any hospital or other institution shall be deemed 
qualified to furnish all or particular classes of hospital 
services as benefits under this Act if—
(1) it is qualified to furnish such services under 
State standards or requirements for the maintenance 
and operation of hospitals which apply to the class 
or classes of services to be furnished; or 
(2) in the absence of such State standards or 
requirements, it is found to afford professional serv-
ices, personnel, and equipment adequate to promote 
the health and safety of individuals requiring the 
class or classes of hospital services to be furnished, 
according to standards which the Board shall estab-
lish after consultation with the Advisory Council. 
SEC. 204. AUXILIARY SERVICES. 
Any person (as defined in section 901(1)) who—
(1) is qualified under State standards or re-
quirements to furnish a class of services included as 
auxiliary services; or 
(2) in the absence of State standards or re-
quirements, 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. 
SEC. 205. AGREEMENTS WITH INDIVIDUAL PRACTITIONERS, 
HOSPITALS, AND OTHERS. 
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 responsibility for 
the administration in the State of benefits under this Act 
(in this Act referred to as the ‘‘State agency’’), to furnish 
such class or classes of services as benefits to individuals 
eligible therefor under this Act. 
SEC. 206. AGREEMENTS WITH VOLUNTARY HEALTH INSUR-
ANCE AND OTHER ORGANIZATIONS. 
(a) IN GENERAL.—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 organization operating a voluntary 
health-service insurance plan or other voluntary 
health-service plan. 
(b) AUTHORIZATION.—The State agency is author-
ized to enter into an agreement with any organization re-
ferred 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 ren-
dering personal health services under this Act. 
(c) QUALIFICATION OF PROVIDERS.—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 agreement to be made 
on the individual’s behalf with the State agency that the 
individual will furnish such services in accordance with 
this Act and with regulations prescribed thereunder. Each 
such individual 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 the in-
dividual or person or on behalf of the individual or person. 
SEC. 207. PROVISIONS COMMON TO ALL AGREEMENTS. 
(a) IN GENERAL.—Each agreement made under this 
title shall—
(1) specify the class or classes of services to be 
furnished or provided pursuant to its terms; 
(2) contain an undertaking to comply with this 
Act and with regulations prescribed thereunder; 
(3) be made upon terms and conditions con-
sistent with the efficient and economical administra-
tion of this Act; and 
(4) continue in force for such period and be ter-
minable upon such notice as may be agreed upon. 
(b) TERM.—No agreement under section 206, and no 
designation of an agent, shall for more than one year pre-
clude any individual or person qualified to furnish per-
sonal health services from exercising such rights as the 
individual or person would otherwise have under this 
title—
(1) to negotiate and enter into an agreement di-
rectly with the State agency; 
(2) to designate another agent for such negotia-
tion; or
(3) to participate in another agreement under 
section 206. 
(c) NON EXCLUSIVE AGREEMENTS.—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 bene-
fits, to the exclusion in whole or in part of other individ-
uals, persons, groups, or organizations qualified to furnish 
or provide such services. 
(d) DISQUALIFICATION.—
(1) IN GENERAL.—If the State agency after in-
vestigation 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 committed a 
substantial breach of the agreement, it shall notify 
such person of its findings, together with the rea-
sons 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 further review provided under title 
VI, may terminate the agreement and withdraw the 
person’s name from the list published pursuant to 
title III.
(2) LIMITATION
ON
SUBSEQUENT
AGREE-
MENTS.—After an agreement has been so termi-
nated, 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 the person’s ability and willingness to dis-
charge all obligations and responsibilities under a 
new agreement satisfactorily in accordance with its 
provisions. 
SEC. 208. METHODS OF PAYMENTS FOR SERVICES. 
(a) PROFESSIONAL SERVICES.—Agreements for the 
furnishing of medical, dental, or podiatric services (other 
than specialist services) as benefits under this Act shall 
provide for payment—
(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 or otherwise promotes the efficient 
and economical provision of medical or dental services in 
the area. 
(b) SPECIALIST SERVICES.—Agreements for the fur-
nishing of specialist services 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) TREATMENT OF GROUPS.—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 practitioners or organizations or 
other agencies which undertake to provide specialist serv-
ices as well as general medical or general dental services. 
(d) HOSPITAL SERVICES.—
(1) USE OF REASONABLE COSTS.—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. 
(2) MAXIMUM RATES.—The Board, after con-
sultation with the Advisory Council and with rep-
resentatives of interested hospital organizations, may 
by regulation prescribe maximum rates for hos-
pitalization furnished as benefits under this Act, and 
such maximum rates may be varied according to 
classes of localities or types of service. 
(3) PAYMENT
BASIS.—Payments to hospitals 
shall be based on the least expensive multiple-bed ac-
commodations available in the hospital unless the 
patient’s condition makes the use of private accom-
modations essential for the patient’s proper medical 
care. 
(4) ADDITIONAL
CHARGES.—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 pa-
tients with respect to the additional cost of more ex-
pensive facilities occupied at the request of the pa-
tient, or with respect to services not included as ben-
efits under this Act. 
(e) HOME-NURSING
SERVICES
AND
AUXILIARY 
SERVICES.—Agreements for the furnishing of home-nurs-
ing 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) PRO-RATING CERTAIN PER CAPITA PAYMENTS.—
In any health-service area where agreements for the fur-
nishing of general medical or general dental services pro-
vide for payment only on a per capita basis, the per capita 
payments with respect to those individuals residing in the 
area who have failed to select a practitioner or other per-
son 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. 
SEC. 209. AMOUNT OF PAYMENTS FOR SERVICES. 
(a) CONSIDERATION OF LOCAL CONDITIONS.—
(1) IN GENERAL.—Rates or amounts of pay-
ment for particular 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.
(2) PROFESSIONAL SERVICES.—In arriving at 
the payments to be made for services of general 
medical and dental practitioners, specialists, profes-
sional and practical nurses, or other practitioners, 
regard shall be had for the annual income or its 
equivalent which the payments will provide, and con-
sideration shall be given to degree of specialization, 
and to the skill, experience, and responsibility in-
volved in rendering the services. 
(3) ADEQUACY.—Such payments, together with 
the other terms and conditions of the agreements 
made under this title, shall be adequate to provide 
professional and financial incentives to practitioners 
to advance in their professions and to practice in lo-
calities where their services are most needed, to en-
courage high standards in the quality of services fur-
nished, to give assistance in their use of opportuni-
ties for postgraduate study, and to allow for ade-
quate vacation. 
(b) EQUIVALENCE IN CHOICE OF PAYMENT METH-
ODS.—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) LIMITATIONS
ON MAXIMUM NUMBER
OF PA-
TIENTS.—Maximum limits upon the number of eligible in-
dividuals 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) TREATMENT OF GROUPS.—The making of an 
agreement under section 206 with a group or other organi-
zation 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 services pursuant to agreements 
made under section 205 directly with the person or per-
sons who furnish the services.
SEC. 210. PROFESSIONAL RIGHTS AND RESPONSIBILITIES. 
(a) TERMINATION
ARRANGEMENTS.—Any person 
who enters into an agreement under this title may termi-
nate such agreement after reasonable notice and after 
suitable arrangements are made to fulfill professional obli-
gations to eligible individuals. 
(b) FREEDOM OF PRACTICE.—Every physician, den-
tist, or nurse agreeing to render services as benefits under 
this Act shall be free to practice such professional’s profes-
sion in the locality of the professional’s own choosing, con-
sistent with the requirements of the laws of the States. 
(c) FREEDOM IN ACCEPTANCE OF PATIENTS.—Every 
physician, dentist, nurse, hospital, or other person enter-
ing 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 in-
dividual requesting the professional’s services. 
(d) FREEDOM FROM SUPERVISION OR CONTROL.—
No supervision or control over the details of administra-
tion or operation, or over the selection, tenure, or com-
pensation of personnel, shall be exercised under the au-
thority of this Act over any hospital which has agreed to 
furnish personal health services as benefits.
TITLE III—LOCAL 
ADMINISTRATION 
SEC. 301. DECENTRALIZATION OF ADMINISTRATION. 
IN GENERAL.—In order that personal health-service 
benefits may be made available promptly and in a manner 
best adapted to local practices, conditions, and needs, re-
sponsibility 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 ad-
ministrative 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 administrative officers, the advice and assistance of 
local area committees. 
(b) DESIGNATION OF HEALTH-SERVICE AREAS.—
The health-service areas of a State shall be those so des-
ignated in the State plan of operations. 
SEC. 302. LOCAL ADMINISTRATIVE COMMITTEE OR OFFI-
CER. 
(a) IN GENERAL.—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. 
(b) ARRANGEMENTS FOR SERVICES.—The local ad-
ministrative committee or officer, with the advice and as-
sistance of such local professional committees as may from 
time to time be established, shall arrange for the fur-
nishing of personal health-service benefits to eligible indi-
viduals in the area and to that end shall—
(1) 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; 
(2) disseminate pertinent information con-
cerning the rights and privileges under this Act of 
eligible individuals and of persons qualified to fur-
nish personal health services as benefits; 
(3) 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; 
(4) 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; 
(5) 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 
(6) take or initiate such other administrative 
action as the committee or officer finds will best 
carry out, within the area, the provisions of this Act, 
and best effectuate its purposes. 
SEC. 303. LOCAL AREA COMMITTEES. 
(a) ESTABLISHMENT.—
(1) IN GENERAL.—A local area committee shall 
be established in each health-service area. 
(2) FUNCTIONS.—If designated by the State as 
a local administrative committee, the local area com-
mittee shall perform the functions specified in sec-
tion 302 and shall formulate policies for the admin-
istration of benefits under this Act in the area. If 
designated as an advisory committee, it shall advise
and assist in the performance of such functions and 
the formulation of such policies. The committee, 
whether administrative or advisory, shall—
(A) participate in the solution of problems 
affecting the administration of such benefits; 
(B) promote impartiality and freedom from 
political influence in such administration; 
(C) perform related functions to the end 
that administration in the area may be respon-
sive to the wishes and needs of persons fur-
nishing and receiving benefits in the area, be 
adapted to local practices and resources; and 
(D) provide adequate and high quality per-
sonal health services to all eligible individuals. 
(b) COMPOSITION.—Each local area committee shall 
consist of not less than 8 nor more than 16 members. The 
members shall be so selected that—
(1) a majority of the committee shall be rep-
resentative of the interests of individuals in the area 
who are eligible for benefits; and 
(2) the remaining members shall be chosen 
from the several professions, hospitals, and other or-
ganizations in the area by whom such benefits will 
be provided. 
(c) MEETINGS.—