roll or disenroll from such organizations or enti-
ties with appropriate notice. 
(D) HEALTH
MAINTENANCE
ORGANIZA-
TIONS.—Under this Act—
(i) health maintenance organizations 
shall be required to reimburse physicians 
based on a salary; and 
(ii) financial incentives between such 
organizations and physicians based on uti-
lization are prohibited. 
SEC. 203. PAYMENT FOR LONG-TERM CARE. 
(a) ALLOTMENT FOR REGIONS.—The Program shall 
provide for each region a single budgetary allotment to 
cover a full array of long-term care services under this 
Act. 
(b) REGIONAL BUDGETS.—Each region shall provide 
a global budget to local long-term care providers for the 
full range of needed services, including in-home, nursing 
home, and community based care. 
(c) BASIS FOR BUDGETS.—Budgets for long-term 
care services under this section shall be based on past ex-
penditures, financial and clinical performance, utilization, 
and projected changes in service, wages, and other related 
factors.
(d) FAVORING NON-INSTITUTIONAL CARE.—All ef-
forts shall be made under this Act to provide long-term 
care in a home- or community-based setting, as opposed 
to institutional care. 
SEC. 204. MENTAL HEALTH SERVICES. 
(a) IN GENERAL.—The Program shall provide cov-
erage for all medically necessary mental health care on 
the same basis as the coverage for other conditions. Li-
censed mental health clinicians shall be paid in the same 
manner as specified for other health professionals, as pro-
vided for in section 202(b). 
(b) FAVORING
COMMUNITY-BASED
CARE.—The 
USNHI Program shall cover supportive residences, occu-
pational therapy, and ongoing mental health and coun-
seling services outside the hospital for patients with seri-
ous mental illness. In all cases the highest quality and 
most effective care shall be delivered, and, for some indi-
viduals, this may mean institutional care. 
SEC. 205. PAYMENT FOR PRESCRIPTION MEDICATIONS, 
MEDICAL SUPPLIES, AND MEDICALLY NEC-
ESSARY ASSISTIVE EQUIPMENT. 
(a) NEGOTIATED PRICES.—The prices to be paid 
each year under this Act for covered pharmaceuticals, 
medical supplies, and medically necessary assistive equip-
ment shall be negotiated annually by the Program.
(b) PRESCRIPTION DRUG FORMULARY.—
(1) IN GENERAL.—The Program shall establish 
a prescription drug formulary system, which shall 
encourage best-practices in prescribing and discour-
age the use of ineffective, dangerous, or excessively 
costly medications when better alternatives are avail-
able. 
(2) PROMOTION OF USE OF GENERICS.—The 
formulary shall promote the use of generic medica-
tions but allow the use of brand-name and off-for-
mulary medications when indicated for a specific pa-
tient or condition. 
(3) FORMULARY
UPDATES
AND
PETITION 
RIGHTS.—The formulary shall be updated frequently 
and clinicians and patients may petition their region 
or the Director to add new pharmaceuticals or to re-
move ineffective or dangerous medications from the 
formulary. 
SEC. 206. CONSULTATION IN ESTABLISHING REIMBURSE-
MENT LEVELS. 
Reimbursement levels under this subtitle shall be set 
after close consultation with regional and State Directors 
and after the annual meeting of National Board of Uni-
versal Quality and Access.
Subtitle B—Funding 
SEC. 211. OVERVIEW: FUNDING THE USNHI PROGRAM. 
(a) IN GENERAL.—The USNHI Program is to be 
funded as provided in subsections (b) and (c). 
(b) ANNUAL APPROPRIATION
FOR FUNDING
OF 
USNHI PROGRAM.—There are authorized to be appro-
priated to carry out this Act such sums as may be nec-
essary. 
(c) INTENT.—Sums appropriated pursuant to sub-
section (b) shall be paid for—
(1) by vastly reducing paperwork; 
(2) by requiring a rational bulk procurement of 
medications; 
(3) from existing sources of Federal govern-
ment revenues for health care; 
(4) by increasing personal income taxes on the 
top 5 percent income earners; 
(5) by instituting a modest payroll tax; and 
(6) by instituting a small tax on stock and bond 
transactions.
SEC. 212. APPROPRIATIONS FOR EXISTING PROGRAMS FOR 
UNINSURED AND INDIGENT. 
Notwithstanding any other provision of law, there are 
hereby transferred and appropriated to carry out this Act, 
amounts equivalent to the amounts the Secretary esti-
mates would have been appropriated and expended for 
Federal public health care programs for the uninsured and 
indigent, including funds appropriated under the Medicare 
program under title XVIII of the Social Security Act, 
under the Medicaid program under title XIX of such Act, 
and under the Children’s Health Insurance Program 
under title XXI of such Act. 
TITLE III—ADMINISTRATION 
SEC. 301. PUBLIC ADMINISTRATION; APPOINTMENT OF DI-
RECTOR. 
(a) IN GENERAL.—Except as otherwise specifically 
provided, this Act shall be administered by the Secretary 
through a Director appointed by the Secretary. 
(b) LONG-TERM CARE.—The Director shall appoint 
a director for long-term care who shall be responsible for 
administration of this Act and ensuring the availability 
and accessibility of high quality long-term care services. 
(c) MENTAL HEALTH.—The Director shall appoint a 
director for mental health who shall be responsible for ad-
ministration of this Act and ensuring the availability and 
accessibility of high quality mental health services. 
SEC. 302. OFFICE OF QUALITY CONTROL. 
The Director shall appoint a director for an Office 
of Quality Control. Such director shall, after consultation 
with state and regional directors, provide annual rec-
ommendations to Congress, the President, the Secretary, 
and other Program officials on how to ensure the highest 
quality health care service delivery. The director of the Of-
fice of Quality Control shall conduct an annual review on 
the adequacy of medically necessary services, and shall 
make recommendations of any proposed changes to the 
Congress, the President, the Secretary, and other USNHI 
program officials. 
SEC. 303. REGIONAL AND STATE ADMINISTRATION; EM-
PLOYMENT OF DISPLACED CLERICAL WORK-
ERS. 
(a) USE
OF REGIONAL OFFICES.—The Program 
shall establish and maintain regional offices. Such regional 
offices shall replace all regional Medicare offices. 
(b) APPOINTMENT OF REGIONAL AND STATE DIREC-
TORS.—In each such regional office there shall be—
(1) one regional director appointed by the Di-
rector; and 
(2) for each State in the region, a deputy direc-
tor (in this Act referred to as a ‘‘State Director’’) 
appointed by the governor of that State. 
(c) REGIONAL OFFICE DUTIES.—
(1) IN GENERAL.—Regional offices of the Pro-
gram shall be responsible for—
(A) coordinating funding to health care 
providers and physicians; and 
(B) coordinating billing and reimburse-
ments with physicians and health care providers 
through a State-based reimbursement system. 
(d) STATE DIRECTOR’S DUTIES.—Each State Direc-
tor shall be responsible for the following duties: 
(1) Providing an annual state health care needs 
assessment report to the National Board of Uni-
versal Quality and Access, and the regional board, 
after a thorough examination of health needs, in 
consultation with public health officials, clinicians, 
patients and patient advocates. 
(2) Health planning, including oversight of the 
placement of new hospitals, clinics, and other health 
care delivery facilities. 
(3) Health planning, including oversight of the 
purchase and placement of new health equipment to 
ensure timely access to care and to avoid duplica-
tion. 
(4) Submitting global budgets to the regional 
director. 
(5) Recommending changes in provider reim-
bursement or payment for delivery of health services 
in the State.
(6) Establishing a quality assurance mechanism 
in the State in order to minimize both under utiliza-
tion and over utilization and to assure that all pro-
viders meet high quality standards. 
(7) Reviewing program disbursements on a 
quarterly basis and recommending needed adjust-
ments in fee schedules needed to achieve budgetary 
targets and assure adequate access to needed care. 
(e) FIRST
PRIORITY
IN
RETRAINING
AND
JOB 
PLACEMENT.—The Program shall provide that clerical 
and administrative workers in insurance companies, doc-
tors offices, hospitals, nursing facilities and other facilities 
whose jobs are eliminated due to reduced administration, 
should have first priority in retraining and job placement 
in the new system. 
SEC. 304. CONFIDENTIAL ELECTRONIC PATIENT RECORD 
SYSTEM. 
(a) IN GENERAL.—The Secretary shall create a 
standardized, confidential electronic patient record system 
in accordance with laws and regulations to maintain accu-
rate patient records and to simplify the billing process, 
thereby reducing medical errors and bureaucracy. 
(b) PATIENT OPTION.—Notwithstanding that all bill-
ing shall be preformed electronically, patients shall have
the option of keeping any portion of their medical records 
separate from their electronic medical record. 
SEC. 305. NATIONAL BOARD OF UNIVERSAL QUALITY AND 
ACCESS. 
(a) ESTABLISHMENT.—
(1) IN GENERAL.—There is established a Na-
tional Board of Universal Quality and Access (in 
this section referred to as the ‘‘Board’’) consisting 
of 15 members appointed by the President, by and 
with the advice and consent of the Senate. 
(2) QUALIFICATIONS.—The appointed members 
of the Board shall include at least one of each of the 
following: 
(A) Health care professionals. 
(B) Representatives of institutional pro-
viders of health care. 
(C) Representatives of health care advo-
cacy groups. 
(D) Representatives of labor unions. 
(E) Citizen patient advocates. 
(3) TERMS.—Each member shall be appointed 
for a term of 6 years, except that the President shall 
stagger the terms of members initially appointed so 
that the term of no more than 3 members expires 
in any year.
(4) PROHIBITION
ON
CONFLICTS
OF
INTER-
EST.—No member of the Board shall have a finan-
cial conflict of interest with the duties before the 
Board. 
(b) DUTIES.—
(1) IN
GENERAL.—The Board shall meet at 
least twice per year and shall advise the Secretary 
and the Director on a regular basis to ensure qual-
ity, access, and affordability. 
(2) SPECIFIC ISSUES.—The Board shall specifi-
cally address the following issues: 
(A) Access to care. 
(B) Quality improvement. 
(C) Efficiency of administration. 
(D) Adequacy of budget and funding. 
(E) Appropriateness of reimbursement lev-
els of physicians and other providers. 
(F) Capital expenditure needs. 
(G) Long-term care. 
(H) Mental health and substance abuse 
services. 
(I) Staffing levels and working conditions 
in health care delivery facilities. 
(3) ESTABLISHMENT
OF
UNIVERSAL, 
BEST 
QUALITY
STANDARD
OF
CARE.—The Board shall
specifically establish a universal, best quality of 
standard of care with respect to—
(A) appropriate staffing levels; 
(B) appropriate medical technology; 
(C) design and scope of work in the health 
workplace; and 
(D) best practices. 
(4) TWICE-A-YEAR REPORT.—The Board shall 
report its recommendations twice each year to the 
Secretary, the Director, Congress, and the Presi-
dent. 
(c) COMPENSATION, ETC.—The following provisions 
of section 1805 of the Social Security Act shall apply to 
the Board in the same manner as they apply to the Medi-
care Payment Assessment Commission (except that any 
reference to the Commission or the Comptroller General 
shall be treated as references to the Board and the Sec-
retary, respectively): 
(1) Subsection (c)(4) (relating to compensation 
of Board members). 
(2) Subsection (c)(5) (relating to chairman and 
vice chairman) 
(3) Subsection (c)(6) (relating to meetings). 
(4) Subsection (d) (relating to director and 
staff; experts and consultants).
(5) Subsection (e) (relating to powers). 
TITLE IV—ADDITIONAL 
PROVISIONS 
SEC. 401. TREATMENT OF VA AND IHS HEALTH PROGRAMS. 
This Act provides for health programs of the Depart-
ment of Veterans’ Affairs and of the Indian Health Serv-
ice to initially remain independent for the 5-year period 
that begins on the date of the establishment of the 
USNHI program, but after such period those programs 
shall be integrated into the USNHI program. 
SEC. 402. PUBLIC HEALTH AND PREVENTION. 
It is the intent of this Act that the Program at all 
times stress the importance of good public health through 
the prevention of diseases. 
SEC. 403. REDUCTION IN HEALTH DISPARITIES. 
It is the intent of this Act to reduce health disparities 
by race, ethnicity, income and geographic region, and to 
provide high quality, cost-effective, culturally appropriate 
care to all individuals regardless of race, ethnicity, sexual 
orientation, or language.
TITLE V—EFFECTIVE DATE 
SEC. 501. EFFECTIVE DATE. 
Except as otherwise specifically provided, this Act 
shall take effect on January 1, 2005, and shall apply to 
items and services furnished on or after such date.
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