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professional or provider committed malpractice, un-
less, during the 90-day period beginning on the date
the system resolves the claim against the profes-
sional or provider, the professional or provider
brings an action contesting the decision made under
the system; and
(7) provides for the regular transmittal to the
Administrator for Health Care Policy and Research
of information on disputes resolved under the sys-
tem, in a manner that assures that the identity of
the parties to a dispute shall not be revealed.
(b) APPLICATION
OF
MALPRACTICE
LIABILITY
STANDARDS TO ALTERNATIVE DISPUTE RESOLUTION.—
The provisions of subtitle B (other than sections 3102 and
3103) shall apply with respect to claims brought under
a State alternative dispute resolution system or the alter-
native Federal system in the same manner as such provi-
sions apply with respect to medical malpractice liability
actions brought in the State.
SEC. 3202. ALTERNATIVE DISPUTE RESOLUTION ADVISORY
BOARD.
(a) ESTABLISHMENT.—Not later than 1 year after
the date of the enactment of this Act, the Secretary shall
establish an Alternative Dispute Resolution Advisory
Board to advise the Secretary regarding the establishment
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of alternative dispute resolution systems at the State and
Federal levels.
(b) COMPOSITION.—The ADR Advisory Board shall
be composed of members appointed by the Secretary from
among representatives of the following:
(1) Physicians.
(2) Hospitals.
(3) Patient advocacy groups.
(4) State governments.
(5) Academic experts from applicable disciplines
(including medicine, law, public health, and econom-
ics) and specialists in arbitration and dispute resolu-
tion.
(6) Health insurers and medical malpractice in-
surers.
(7) Medical product manufacturers.
(8) Pharmaceutical companies.
(9) Other professions and groups determined
appropriate by the Secretary.
(c) DUTIES.—The ADR Advisory Board shall—
(1) examine various dispute resolution systems
and provide advice and assistance to States regard-
ing the establishment of such systems;
(2) not later than 1 year after the appointment
of its members, submit to the Secretary—
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(A) a model alternative dispute resolution
system that may be used by a State for pur-
poses of this subtitle, and
(B) a model alternative Federal system
that may be used by the Secretary pursuant to
section 3203(b)(1); and
(3) review the applications of States for certifi-
cation of State alternative dispute resolution systems
and make recommendations to the Secretary regard-
ing whether the systems should be certified under
section 3203.
SEC. 3203. CERTIFICATION OF STATE SYSTEMS; APPLICA-
BILITY OF ALTERNATIVE FEDERAL SYSTEM.
(a) CERTIFICATION.—
(1) APPLICATION BY STATE.—Each State shall
submit an application to the ADR Advisory Board
describing its alternative dispute resolution system
and containing such information as the ADR Advi-
sory Board may require to make a recommendation
regarding whether the system meets the require-
ments of this subtitle.
(2) BASIS FOR CERTIFICATION.—Not later than
October 1 of each year (beginning with 1995), the
Secretary, 
taking 
into 
consideration 
the 
rec-
ommendations of the ADR Advisory Board, shall
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certify a State’s alternative dispute resolution sys-
tem under this subsection for the following calendar
year if the Secretary determines that the system
meets the requirements of section 3201.
(b) APPLICABILITY OF ALTERNATIVE FEDERAL SYS-
TEM.—
(1) ESTABLISHMENT
AND
APPLICABILITY.—
Not later than October 1, 1995, the Secretary, tak-
ing into consideration the model alternative Federal
system submitted by the ADR Advisory Board under
section 3202(c)(2)(B), shall establish by rule an al-
ternative Federal ADR system for the resolution of
medical malpractice liability claims during a cal-
endar year in States that do not have in effect an
alternative dispute resolution system certified under
subsection (a) for the year.
(2) REQUIREMENTS FOR SYSTEM.—Under the
alternative Federal ADR system established under
paragraph (1)—
(A) paragraphs (1), (2), (6), and (7) of
section 3201(a) shall apply to claims brought
under the system;
(B) if the system provides for the resolu-
tion of claims through arbitration, the claims
brought under the system shall be heard and
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resolved by arbitrators appointed by the Sec-
retary in consultation with the Attorney Gen-
eral; and
(C) with respect to a State in which the
system is in effect, the Secretary may (at the
State’s request) modify the system to take into
account the existence of dispute resolution pro-
cedures in the State that affect the resolution
of medical malpractice liability claims.
(3) TREATMENT
OF
STATES
WITH
ALTER-
NATIVE SYSTEM IN EFFECT.—If the alternative Fed-
eral ADR system established under this subsection is
applied with respect to a State for a calendar year,
the State shall make a payment to the United States
(at such time and in such manner as the Secretary
may require) in an amount equal to 110 percent of
the costs incurred by the United States during the
year as a result of the application of the system with
respect to the State.
SEC. 3204. REPORTS ON IMPLEMENTATION AND EFFEC-
TIVENESS OF ALTERNATIVE DISPUTE RESO-
LUTION SYSTEMS.
(a) IN GENERAL.—Not later than 5 years after the
date of the enactment of this Act, the Secretary shall pre-
pare and submit to the Congress a report describing and
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evaluating State alternative dispute resolution systems op-
erated pursuant to this subtitle and the alternative Fed-
eral system established under section 3203(b).
(b) CONTENTS OF REPORT.—The Secretary shall in-
clude in the report prepared and submitted under sub-
section (a)—
(1) information on—
(A) the effect of the alternative dispute
resolution systems on the cost of health care
within each State,
(B) the impact of such systems on the ac-
cess of individuals to health care within the
State, and
(C) the effect of such systems on the qual-
ity of health care provided within the State; and
(2) to the extent that such report does not pro-
vide information on no-fault systems operated by
States as alternative dispute resolution systems pur-
suant to this part, an analysis of the feasibility and
desirability of establishing a system under which
medical malpractice liability claims shall be resolved
on a no-fault basis.
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TITLE IV—PAPERWORK REDUC-
TION AND ADMINISTRATIVE
SIMPLIFICATION
SEC. 4001. PREEMPTION OF STATE QUILL PEN LAWS.
After 1995, no effect shall be given to any provision
of State law that requires medical or health insurance
records (including billing information) to be maintained
in written, rather than electronic, form.
SEC. 4002. CONFIDENTIALITY OF ELECTRONIC HEALTH
CARE INFORMATION.
(a) PROMULGATION OF REQUIREMENTS.—
(1) IN GENERAL.—The Secretary of Health and
Human Services shall promulgate, and may modify
from time to time, requirements to facilitate and en-
sure the uniform, confidential treatment of individ-
ually identifiable health care information in elec-
tronic environments.
(2) ITEMS
TO
BE
INCLUDED.—The require-
ments under this subsection shall—
(A) provide for the preservation of con-
fidentiality and privacy rights in electronic
health care claims processing and payment;
(B) apply to the collection, storage, han-
dling, and transmission of individually identifi-
able health care data (including initial and sub-
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sequent disclosures) in electronic form by all ac-
countable health plans, public and private third-
party payers, providers of health care, and all
other entities involved in the transactions;
(C) not apply to public health reporting re-
quired under State or Federal law;
(D) delineate protocols for securing elec-
tronic storage, processing, and transmission of
health care data;
(E) specify fair information practices that
assure a proper balance between required dis-
closures and use of data, including—
(i) creating a proper balance between
what an individual is expected to divulge to
a record-keeping organization and what the
individual seeks in return,
(ii) minimizing the extent to which in-
formation concerning an individual is itself
a source of unfairness in any decision
made on the basis of such information, and
(iii) creating and defining obligations
respecting the uses and disclosures that
will be made of recorded information about
an individual;
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(F) require publication of the existence of
health care data banks;
(G) establish appropriate protections for
highly sensitive data (such as data concerning
mental health, substance abuse, and commu-
nicable and genetic diseases);
(H) encourage the use of alternative dis-
pute resolution mechanisms (where appro-
priate); and
(I) provide for the deletion of information
that is no longer needed to carry out the pur-
pose for which it was collected.
(3) CONSULTATION WITH WORKING GROUP.—In
promulgating and modifying requirements under this
subsection, the Secretary shall consult with a work-
ing group of knowledgeable individuals representing
all interested parties (including third-party payers,
providers, consumers, employers, information man-
agers, and technical experts).
(4) DEADLINE.—The Secretary shall first pro-
mulgate requirements under this subsection by not
later than six months after the date of the enact-
ment of this Act.
(b) APPLICATION OF REQUIREMENTS.—
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(1) STATE
ENFORCEMENT
OF
SIMILAR
RE-
QUIREMENTS.—The 
requirements 
promulgated
under subsection (a) shall not apply to health care
information in a State if—
(A) the State has applied to the Secretary
for a determination that the State has in effect
a law that provides for the application of re-
quirements with respect to such information
(and enforcement provisions with respect to
such requirements) consistent with such re-
quirements (and with the enforcement provi-
sions of subsection (c)), and
(B) the Secretary determines that the
State has such a law in effect.
(2) APPLICATION
TO
CURRENT
INFORMA-
TION.—The Secretary shall specify the extent to
which (and manner in which) the requirements pro-
mulgated under subsection (a) apply to information
collected before the effective date of the require-
ments.
(c) DEFENSE FOR PROPER DISCLOSURES.—An en-
tity that establishes that it has disclosed health care infor-
mation in accordance with the requirements promulgated
under subsection (a) has established a defense in an action
brought for improper disclosure of such information.
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(d) PENALTIES FOR VIOLATIONS.—An entity that
collects, stores, handles, transmits, or discloses health care
information in violation of the requirements promulgated
under subsection (a) is liable for civil damages, equitable
remedies, and attorneys’ fees (if appropriate), in accord-
ance with regulations of the Secretary.
SEC. 4003. STANDARDIZATION FOR THE ELECTRONIC RE-
CEIPT AND TRANSMISSION OF HEALTH PLAN
INFORMATION.
(a) GOALS.—The Secretary shall establish national
goals, and time frameworks, respecting the progress to be
made by the health care industry in eliminating unneces-
sary paperwork and achieving appropriate standardization
in the areas of electronic receipt and transmission of
health care claims and health plan information and eligi-
bility verification (consistent with the requirements pro-
mulgated under section 4002(a)).
(b) CONTINGENT REQUIREMENTS.—If the Secretary
determines that the health care industry has failed to meet
the goals established under subsection (a) by the deadlines
established by the Secretary under such subsection, the
Secretary shall promulgate (and may, from time to time,
modify) standards and requirements concerning the elec-
tronic receipt and transmission of health plan claims
forms and other health plan information.
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(c) COMPLIANCE.—
(1) IN GENERAL.—The Secretary may impose a
civil money penalty on any health plan (other than
a health plan described in paragraph (2)) that fails
to comply with standards and requirements promul-
gated under subsection (b) in an amount not to ex-
ceed $100 for each such failure. The provisions of
section 1128A of the Social Security Act (other than
the first sentence of subsection (a) and other than
subsection (b)) shall apply to a civil money penalty
under this paragraph in the same manner as such
provisions apply to a penalty or proceeding under
section 1128A(a) of such Act.
(2) PLANS SUBJECT TO EFFECTIVE STATE REG-
ULATION.—A plan described in this paragraph is a
health plan that is subject to regulation by a State,
if the Secretary finds that—
(A) the State provides for application of
the standards and requirements promulgated
under subsection (b), and
(B) the State regulatory program provides
for the appropriate and effective enforcement of
such standards and requirements with respect
to such plans.
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(d) CONSULTATION.—The Secretary shall conduct
activities under this section in consultation with the Ac-
credited Standards Committee X–12 of the American Na-
tional Standards Institute, insurers, providers, and others.
SEC. 4004. USE OF UNIFORM HEALTH CLAIMS FORMS AND
IDENTIFICATION NUMBERS.
(a) GOALS.—The Secretary shall establish national
goals, and time frameworks, respecting the progress to be
made by the health care industry in achieving uniform-
ity—
(1) in the format and content of basic claims
forms under health plans, and
(2) in the use of common identification num-
bers for beneficiaries and providers of health care
items or services under health plans.
(b) CONTINGENT REQUIREMENTS.—If the Secretary
determines that the health care industry has failed to meet
the goals established under subsection (a) by the deadlines
established by the Secretary under such subsection, the
Secretary shall promulgate (and may, from time to time,
modify) standards and requirements concerning—
(1) the format and content of basic claims
forms under health plans, and
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(2) the common identification numbers to be
used by health plans to identify health plan bene-
ficiaries and health care providers.
(c) COMPLIANCE.—
(1) IN GENERAL.—The Secretary may impose a
civil money penalty on any health plan (other than
a health plan described in paragraph (2)) that fails
to comply with standards and requirements promul-
gated under subsection (b) in an amount not to ex-
ceed $100 for each such failure. The provisions of
section 1128A of the Social Security Act (other than
the first sentence of subsection (a) and other than
subsection (b)) shall apply to a civil money penalty
under this paragraph in the same manner as such
provisions apply to a penalty or proceeding under
section 1128A(a) of such Act.
(2) PLANS SUBJECT TO EFFECTIVE STATE REG-
ULATION.—A plan described in this paragraph is a
health plan that is subject to regulation by a State,
if the Secretary finds that—
(A) the State provides for application of
the standards and requirements promulgated
under subsection (b), and
(B) the State regulatory program provides
for the appropriate and effective enforcement of
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such standards and requirements with respect
to such plans.
(d) CONSULTATION.—The Secretary shall conduct
activities under this section in consultation with the
Workgroup for Electronic Data Interchange and with in-
surers, providers, and others.
SEC. 4005. PRIORITY AMONG INSURERS.
(a) GOALS.—The Secretary shall establish national
goals, and time frameworks, respecting the progress to be
made by the health care industry in achieving uniformity
in the rules for determining the liability of insurers when
benefits are payable under two or more health plans.
(b) CONTINGENT REQUIREMENTS.—If the Secretary
determines that the health care industry has failed to meet
the goals established under subsection (a) by the deadlines
established by the Secretary under such subsection, the
Secretary shall promulgate (and may, from time to time,
modify) rules for determining the liability of health plans
when benefits are payable under two or more health plans.
(c) COMPLIANCE.—
(1) IN GENERAL.—The Secretary may impose a
civil money penalty on any health plan (other than
a health plan described in paragraph (2)) that fails
to comply with rules promulgated under subsection
(b) in an amount not to exceed $100 for each such
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failure. The provisions of section 1128A of the So-
cial Security Act (other than the first sentence of
subsection (a) and other than subsection (b)) shall
apply to a civil money penalty under this paragraph
in the same manner as such provisions apply to a
penalty or proceeding under section 1128A(a) of
such Act.
(2) PLANS SUBJECT TO EFFECTIVE STATE REG-
ULATION.—A plan described in this paragraph is a
health plan that is subject to regulation by a State,
if the Secretary finds that—
(A) the State provides for application of
the rules established under subsection (b), and
(B) the State regulatory program provides
for the appropriate and effective enforcement of
such rules with respect to such plans.
(d) CONSULTATION.—The Secretary shall conduct
activities under this section in consultation with health
plans.
SEC. 4006. FURNISHING OF INFORMATION AMONG HEALTH
PLANS.
(a) GOALS.—The Secretary shall establish national
goals, and time frameworks, respecting the progress to be
made by the health care industry in achieving uniformity
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in the availability of information among health plans when
benefits are payable under two or more health plans.
(b) CONTINGENT REQUIREMENTS.—If the Secretary
determines that the health care industry has failed to meet
the goals established under subsection (a) by the deadlines
established by the Secretary under such subsection, the
Secretary shall promulgate (and may, from time to time,
modify) requirements concerning the transfer among
health plans (and annual updating) of appropriate infor-
mation (which may include requirements for the use of
unique identifiers, and for the listing of all individuals cov-
ered under a health plan).
(c) COMPLIANCE.—
(1) IN GENERAL.—The Secretary may impose a
civil money penalty on any health plan (other than
a health plan described in paragraph (2)) that fails
to comply with requirements promulgated under sub-
section (b) in an amount not to exceed $100 for
each such failure. The provisions of section 1128A
of the Social Security Act (other than the first sen-
tence of subsection (a) and other than subsection
(b)) shall apply to a civil money penalty under this
paragraph in the same manner as such provisions
apply to a penalty or proceeding under section
1128A(a) of such Act.
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(2) PLANS SUBJECT TO EFFECTIVE STATE REG-
ULATION.—A plan described in this paragraph is a
health plan that is subject to regulation by a State,
if the Secretary finds that—
(A) the State provides for application of
the requirements promulgated under subsection
(b), and
(B) the State regulatory program provides
for the appropriate and effective enforcement of
such requirements with respect to such plans.
(d) CONSULTATION.—The Secretary shall conduct
activities under this section in consultation with health
plans.
SEC. 4007. DEFINITIONS.
For purposes of this title—
(1) The term ‘‘health plan’’ means any contract
or arrangement under which an entity bears all or
part of the cost of providing health care items and
services, including a hospital or medical expense in-
curred policy or certificate, hospital or medical serv-
ice plan contract, or health maintenance subscriber
contract (including any closed accountable health
plan), but does not include (except for purposes of
sections 4005 and 4006)—
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(A) coverage only for accident, dental, vi-
sion, disability, or long term care, medicare
supplemental health insurance, or any combina-
tion thereof,
(B) coverage issued as a supplement to li-
ability insurance,
(C) workers’ compensation or similar in-
surance, or
(D) automobile medical-payment insur-
ance.
(2) The term ‘‘provider’’ means a physician,
hospital, pharmacy, laboratory, or other person li-
censed or otherwise authorized under applicable
State laws to furnish health care items or services.
(3) The term ‘‘Secretary’’ means the Secretary
of Health and Human Services.
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TITLE V—EXPANDING ACCESS/
PREVENTIVE CARE
Subtitle 
A—Expanding 
Access
Through Community Health Au-
thorities
SEC. 
5001. 
COMMUNITY 
HEALTH 
AUTHORITIES 
DEM-
ONSTRATION PROJECTS.
(a) IN GENERAL.—Title XIX of the Social Security
Act, as amended by section 13631(b) of the Omnibus
Budget Reconciliation Act of 1993, is amended—
(1) by redesignating section 1931 as section
1932; and
(2) by inserting after section 1930 the following
new section:
‘‘COMMUNITY HEALTH AUTHORITIES DEMONSTRATION
PROJECTS
‘‘SEC. 1931. (a) IN GENERAL.—In order to test the
effectiveness of various innovative health care delivery ap-
proaches through the operation of community health au-
thorities, the Secretary shall operate a program under
which States establish projects to demonstrate the effec-
tiveness of such approaches in providing access to cost-
effective preventive and primary care and related services
for various areas and populations, including low-income
residents of medically underserved areas or for medically
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underserved populations. A State may operate more than
one such project.
‘‘(b) SELECTION OF STATE PROJECTS.—
‘‘(1) IN GENERAL.—A State is eligible to par-
ticipate in the program, and establish a demonstra-
tion project, under this section only if—
‘‘(A) the State submits to the Secretary an
application, at such time and in such form as
the Secretary may require, for participation in
the program; and
‘‘(B) the Secretary finds that—
‘‘(i) the application contains assur-
ances that the State will support the devel-
opment of a community health authority
that meets the requirements of this sec-
tion,
‘‘(ii) the community health authority
will meet the requirements for such an au-
thority under subsection (c),
‘‘(iii) the State provides sufficient as-
surances that the demonstration project of
a community health authority meets (or,
when operational, will meet) the require-
ments of subsection (d), and
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‘‘(iv) the State will comply with the
requirements of subsections (g) and (h).
‘‘(2) CONTENTS OF APPLICATION.—Each appli-
cation submitted under paragraph (1) for a dem-
onstration project shall include at least the follow-
ing:
‘‘(A) A description of the proposed commu-
nity health authority and of the area or popu-
lation that the authority will serve.
‘‘(B) A demonstration that the CHA will
serve at least one geographic area or population
group that is designated as medically under-
served under section 330 of the Public Health
Service Act or as having a shortage of health
professionals under section 332 of such Act.
‘‘(C) An assessment of the area’s or popu-
lation’s need for services and an assurance that
the services of the CHA will be responsive to
those needs.
‘‘(D) A list of the items and services to be
furnished by the CHA under the project, bro-
ken down by those items and services that are
treated as medical assistance under the State
plan under this title and other items and serv-
ices that will be provided by the CHA (either
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directly or through coordination with other enti-
ties).
‘‘(E) An assurance that the CHA has en-
tered into (or plans to enter into) written par-
ticipation agreements with a sufficient number
of providers to enable the CHA to furnish all of
such items and services to enrolled individuals.
‘‘(F) An assurance that the State plan
under this title will provide payment to the au-
thority in accordance with subsection (e).
‘‘(G) Evidence of support and assistance
from other State agencies with responsibility for
providing or supporting the provision of preven-
tive and primary care services to underserved
and at-risk populations.
‘‘(H) A proposed budget for the CHA.
‘‘(3) PRIORITY.—The Secretary shall give prior-
ity to those applications proposing to support a
CHA that includes as participating providers all
Federally-qualified health centers serving the area or
population or (in areas for which there are no Fed-
erally-qualified health centers) all entities that would
be Federally-qualified health centers but for the fail-
ure to meet the requirement described in section
329(f)(2)(G)(i) of the Public Health Service Act or
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the requirement described in section 330(e)(3)(G)(i)
of such Act (relating to the composition of the enti-
ty’s governing board).
‘‘(4) PERIOD OF APPROVAL.—Each project ap-
proved under this section shall be approved for a pe-
riod of not less than 5 years, subject to renewal for
subsequent periods unless such approval is with-
drawn for cause by the Secretary or at the request
of the State.
‘‘(c) COMMUNITY HEALTH AUTHORITY (CHA) DE-
FINED.—In this section, the terms ‘community health au-
thority’ and ‘CHA’ mean a nonprofit entity that meets the
following requirements:
‘‘(1) The entity serves (or will serve at the time
it becomes operational under a project) a geographic
area or population group that includes those des-
ignated—
‘‘(A) under section 330 of the Public
Health Service Act as medically underserved, or
‘‘(B) under section 332 of such Act as a
health professions shortage area.
‘‘(2) The entity enrolls—
‘‘(A) individuals and families who are med-
icaid-eligible;
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‘‘(B) within the limits of its available re-
sources and capacity, other individuals who
have incomes below 200 percent of the Federal
official poverty level; and
‘‘(C) within the limits of its available re-
sources and capacity, other individuals and
families who are able to pay the costs of enroll-
ment.
‘‘(3) Through its participating providers, the
entity provides or, through contracts, arranges for
the provision of (or, by the time it become oper-
ational, will so provide or arrange for the provision
of) at least preventive services, primary care serv-
ices, inpatient and outpatient hospital services, and
any other service provided by a participating pro-
vider for which payment may be made under the
State plan under this title to enrolled individuals.
‘‘(4) The entity must include (to the maximum
extent practicable) as participating providers any of
the following providers that furnish services provided
by (or arranged by) the entity that are located in or
serve the area or population to be covered:
‘‘(A) Federally-qualified health centers.
‘‘(B) Rural health clinics.
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‘‘(C) Local public health agencies that fur-
nish such services.
‘‘(D) A hospital (or other provider of inpa-
tient or outpatient hospital services) which has
a participation agreement in effect with the
State under its plan under this title, which is
located in or serving the area or population to
be served.
‘‘(5) The entity may include as participating
providers other providers (which may include private
physicians or group practice offices, other commu-
nity clinics, limited service providers (such as pre-
natal clinics), and health professionals teaching pro-
grams (such as area health educational centers))
and take other appropriate steps, to the extent need-
ed to assure that the network is reasonable in size
and able to provide (or arrange for the provision of)
the services it proposes to furnish to its enrollees.
‘‘(6) The entity must maintain written agree-
ments with each participating provider under which
the provider agrees to participate in the CHA and
agrees to accept payment from the CHA as payment
in full for services furnished to individuals enrolled
with the CHA (subject to the requirements of sub-
section (g)(4), in the case of services furnished by a
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provider that are described in subparagraph (B) or
(C) of section 1905(a)(2)).
‘‘(7) Under the written agreements described in
paragraph (6), if a majority of the board of directors
of the entity has determined that a participating
provider is failing to meet any of the requirements
of the participation agreement, the board may termi-
nate the provider’s participation agreement in ac-
cordance with the following requirements:
‘‘(A) Subject to subparagraph (B), prior to
any termination of a provider’s participation
agreement, the provider shall be entitled to 30
days prior notice, a reasonable opportunity to
correct any deficiencies, and an opportunity for
a full and fair hearing conducted by the entity
to dispute the reasons for termination. The pro-
vider shall be entitled to appeal the board of di-
rectors’ decision directly to a committee consist-
ing of representatives of all of the entity’s par-
ticipating providers.
‘‘(B) If a majority of the board of directors
of the entity determines that the continued par-
ticipation of a provider presents an immediate
threat to the health and safety of patients or a
substantial risk of improper diversion of funds,
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the board may suspend the provider’s participa-
tion agreement (including the receipt of funds
under the agreement) for a period of up to 60
days. During this period, the entity shall take
steps to ensure that patients who were assigned
to or cared for by the suspended provider are
appropriately assigned or referred to alternative
participating providers. The suspended provider
shall be entitled to a hearing within the period
of the suspension to show cause why the sus-
pension should be lifted and its participation
agreement restored. If dissatisfied with the
board’s decision, the provider shall be entitled
to appeal the decision directly to a committee
consisting of representatives of all of the enti-
ty’s participating providers.
‘‘(C) For all other disputes between the en-
tity and its participating providers (including
disputes over the amounts due or interim rates
to be paid to a provider), the entity shall pro-
vide an opportunity for a full and fair hearing.
‘‘(8) The entity must be governed by a board of
directors that includes representatives of the partici-
pating providers and, as appropriate, other health
professionals, civic or business leaders, elected offi-
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cials, and residents of the area or population served.
Not less than 51 percent of such board shall be com-
posed of individuals who are enrolled in the CHA
and who are representatives of the community
served.
‘‘(d) DEMONSTRATION PROJECT REQUIREMENTS.—
The requirements of this subsection, with respect to a
demonstration project of a CHA under this section, are
as follows:
‘‘(1)(A) All services furnished by the CHA
under the project shall be available and accessible to
all enrolled individuals and, except as provided in
subparagraph (B), must be available without regard
to an individual’s ability to pay for such services.
‘‘(B) A CHA shall prepare a schedule of dis-
counts to be applied to the payment of premiums by
individuals who are not medicaid-eligible individuals
which shall be adjusted on the basis of the individ-
ual’s ability to pay.
‘‘(2) The CHA shall take appropriate steps to
emphasize the provision of preventive and primary
care services, and shall ensure that each enrolled in-
dividual is assigned to a primary care physician (to
the greatest extent appropriate and feasible), except
that the CHA shall establish a process through
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which an enrolled individual may be assigned to an-
other primary care physician for good cause shown.
‘‘(3) The CHA must make reasonable efforts to
reduce the unnecessary or inappropriate use of hos-
pital or other high-cost services through an emphasis
on preventive and primary care services, the imple-
mentation of utilization review or other appropriate
methods.
‘‘(4) The State must regularly provide the CHA
with information on other medical, health, and relat-
ed benefits that may be available to individuals en-
rolled with the CHA under programs other than the
State plan under this title, and the CHA must pro-
vide its enrolled individuals with enrollment informa-
tion and other assistance to assist them in obtaining
such benefits.
‘‘(5) The State and the CHA must meet such
financial standards and requirements and reporting
requirements as the Secretary specifies and must
prepare and submit to the Secretary an annual inde-
pendent financial audit conducted in accordance with
requirements specified by the Secretary.
‘‘(6) In collaboration with the State, the CHA
must adopt and use community-oriented, patient-re-
sponsive quality assurance and control systems in
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accordance with requirements specified by the Sec-
retary. Such systems must include at least an ongo-
ing quality assurance program that measures
consumer satisfaction with the care provided under
the network, stresses improved health outcomes, and
operates a community health status improvement
process that identifies and investigates community
health problems and implements measures designed
to remedy them.
‘‘(e) CAPITATION PAYMENTS.—
‘‘(1) IN
GENERAL.—Under a demonstration
project under this section, the State shall enter into
an annual contract with the CHA under which the
State shall make monthly payments to the CHA for
covered services furnished through the CHA to indi-
viduals entitled to medical assistance under this title
in the amount specified in paragraph (2). Payment
shall be made at the beginning of each month on the
basis of estimates of the amounts payable and
amounts subsequently paid are subject to adjust-
ment to reflect the amounts by which previous pay-
ments were greater or less than the amount of pay-
ments that should have been made.
‘‘(2) AMOUNT OF CAPITATION PAYMENT.—The
amount of a monthly payment under paragraph (1)
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during a contract year, shall be not less than 1⁄12 of
the product of—
‘‘(A)(i) the average per capita amounts ex-
pended under this title under the State plan for
covered services to be furnished under the dem-
onstration project for similar Medicaid-eligible
individuals for the most recent 12-month period
ending before the date of the enactment of this
section, increased by (ii) the percentage change
in the consumer price index for all urban con-
sumers (all items; U.S. city average) during the
period that begins upon the expiration of such
12-month period and ends upon the expiration
of the most recent 12-month period ending be-
fore the first month of the contract year for
which complete financial data on such index is
available, and
‘‘(B) the number of Medicaid-eligible indi-
viduals enrolled under the project as of the
15th day of the month prior to the first month
of the contract year (or, in the case of the first
year for which a contract is in effect under this
subsection, the CHA’s reasonable estimate of
the number of such individuals who will be en-
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rolled in the project as of the 15th day of such
month).
‘‘(f) ADDITIONAL STATE ASSISTANCE
FOR PLAN-
NING, DEVELOPMENT, AND OPERATIONS.—
‘‘(1) IN GENERAL.—Subject to paragraph (2),
in addition to the payments under subsection (e),
demonstration projects approved under this section
are eligible to have approved expenditures described
in paragraph (3) treated, for purposes of section
1903(a)(7), as expenditures found necessary by the
Secretary for the proper and efficient administration
of the State plan under this title.
‘‘(2) SPECIAL RULES.—
‘‘(A) LIMITATION WITH RESPECT TO ANY
COMMUNITY
HEALTH
AUTHORITY.—The total
amount of expenditures with respect to any
CHA that may be treated as expenditures for
medical assistance under paragraph (1) for any
12-month period shall not exceed $250,000.
‘‘(B) 
LIMITATION
ON
NUMBER
OF
YEARS.—The number of 12-month periods for
which expenditures are treated as expenditures
for medical assistance under paragraph (1) for
a CHA shall not exceed—
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‘‘(i) 2 for expenditures for planning
and development assistance, described in
paragraph (3)(A), and
‘‘(ii) 2 for expenditures for oper-
ational assistance, described in paragraph
(3)(B).
‘‘(C) 
NO
RESULTING
REDUCTION
IN
AMOUNTS PROVIDED UNDER PHSA GRANTS.—
No grant to a CHA or one of its participating
providers under the Public Health Service Act
or this Act may be reduced on the ground that
activities of the CHA that are considered ap-
proved expenditures under paragraph (3) are
activities for which the CHA or the participat-
ing providers received funds under such Act.
‘‘(3) 
APPROVED
EXPENDITURES.—The 
ap-
proved expenditures described in this paragraph are
as follows:
‘‘(A) PLANNING AND DEVELOPMENT.—Ex-
penditures for planning and development with
respect to a CHA, including—
‘‘(i) developing internal management,
legal and financial and clinical, informa-
tion, and reporting systems for the CHA,
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and carrying out other operating activities
of the CHA;
‘‘(ii) recruiting, training and com-
pensating management staff of the CHA
and, as appropriate and necessary, man-
agement and clinical staff of any partici-
pating provider;
‘‘(iii) purchasing essential equipment
and acquiring, modernizing, expanding, or
(if cost-effective) constructing facilities for
the CHA and for participating providers
(including amortization costs and payment
of interest on loans); and
‘‘(iv) entering into arrangements to
obtain or participate in emerging medical
technologies, including telemedicine.
‘‘(B) OPERATIONS.—Expenditures in sup-
port of the operations of a CHA, including—
‘‘(i) the ongoing management of the
CHA, including daily program administra-
tion, recordkeeping and reporting, assur-
ance of proper financial management (in-
cluding billings and collections) and over-
sight of program quality;
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‘‘(ii) developing and operating systems
to enroll eligible individuals in the CHA;
‘‘(iii) data collection, in collaboration
with the State medicaid agency and the
State health department, designed to
measure changes in patient access to care,
the quality of care furnished, and patient
health status, and health care outcomes;
‘‘(iv) ongoing community outreach
and community education to all residents
of the area or population served, to pro-
mote the enrollment of eligible individuals
and the appropriate utilization of health
services by such individuals;
‘‘(v) the establishment of necessary
reserves or purchase of stop-loss coverage;
and
‘‘(vi) activities relating to health pro-
fessions training, including residency train-
ing at participating provider sites.
‘‘(g) ADDITIONAL REQUIREMENTS.—
‘‘(1) MANDATORY ENROLLMENT OF MEDICAID-
ELIGIBLE INDIVIDUALS.—Notwithstanding any pro-
vision of section 1903(m), a State participating in a
demonstration project under this section may require
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that each medicaid-eligible resident in the service
area of a CHA operating under the project is not eli-
gible to receive any medical assistance under the
State plan that may be obtained through enrollment
with the CHA unless the individual receives such as-
sistance through enrollment with the CHA.
‘‘(2) CONTINUED
ENTITLEMENT
TO
ADDI-
TIONAL BENEFITS.—In the case of a medicaid-eligi-
ble individual enrolled with a CHA under a dem-
onstration project under this section, the individual
shall remain entitled to medical assistance for serv-
ices which are not covered services under the project.
‘‘(3) HMO-RELATED REQUIREMENTS.—A CHA
under this section shall be deemed to meet the re-
quirements of section 1903(m) (subject to paragraph
(1)) in the same manner as an entity listed under
section 1903(m)(2)(G).
‘‘(4) TREATMENT
OF
FEDERALLY-QUALIFIED
HEALTH CENTERS AND RURAL HEALTH CLINICS.—
Payments under a demonstration project under this
section to a Federally qualified health center or
rural health clinic which is a participating provider
shall 
be 
made 
consistent 
with 
section
1902(a)(13)(E) for all services offered by the CHA
which are provided by such a center or clinic.
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‘‘(5) OUTSTATIONING ELIGIBILITY WORKERS.—
Under the project, the State may (in addition to
meeting the requirements of section 1902(a)(55))
provide for, or pay the reasonable costs of, station-
ing eligibility workers at appropriate service sites
under the project, and may permit medicaid-eligible
individuals to be enrolled under the State plan at
such a CHA or at such a site.
‘‘(6) PURCHASE
OF
STOP-LOSS
COVERAGE.—
The State shall ensure that the CHA has purchased
stop-loss coverage to protect against default on its
obligations under the project. If an entity otherwise
qualified to serve as a CHA is prohibited under
State law from purchasing such coverage, the State
shall waive the application of such law to the extent
necessary to permit the entity to purchase such cov-
erage.
‘‘(h) EVALUATION AND REPORTING.—
‘‘(1) CHA.—Each CHA in a State with a dem-
onstration project approved under this section shall
prepare and submit to the State an annual report on
its activities during the previous year.
‘‘(2) STATE.—Taking into account the reports
submitted pursuant to paragraph (1), each State
with a demonstration project approved under this
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section shall prepare and submit to the Secretary an
annual evaluation of its activities and services under
this section. Such evaluation shall include an analy-
sis of the effectiveness of the project in providing
cost-effective health care to enrolled individuals.
‘‘(3) REPORT TO CONGRESS.—Not later than 3
years after the date of the enactment of this section,
the Secretary shall submit to Congress a report on
the demonstration projects conducted under this sec-
tion. Such report shall include an analysis of the ef-
fectiveness of such projects in providing cost-effec-
tive health care for the areas or populations served.
‘‘(i) COLLABORATION IN ADMINISTRATION.—In car-
rying out this section, the Secretary shall assure the high-
est possible level of collaboration between the Health Care
Financing Administration and the Public Health Service.
Such collaboration may include (if appropriate and fea-
sible) any of the following:
‘‘(1) The provision by the Public Health Service
of new or increased grant support to eligible entities
participating in a CHA, in order to expand the avail-
ability of services (particularly preventive and pri-
mary care services).
‘‘(2) The placement of health professionals at
eligible locations and collaboration with Federally-as-
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sisted health professions training programs located
in or near the areas served by community health au-
thorities.
‘‘(3) The provision of technical and other non-
financial assistance.
‘‘(j) DEFINITIONS.—In this section:
‘‘(1) MEDICAID-ELIGIBLE
INDIVIDUAL.—The
term ‘medicaid-eligible individual’ means an individ-
ual described in section 1902(a)(10)(A) and entitled
to medical assistance under the State plan.
‘‘(2) PARTICIPATING
PROVIDER.—The term
‘participating provider’ means, with respect to a
CHA, a provider that has entered into an agreement
with the CHA for the provision of covered services
under a project under this section.
‘‘(3) PREVENTIVE AND PRIMARY CARE SERV-
ICES.—‘Preventive’ and ‘primary’ services include
those services described in section 1905(l)(2)(A) and
included as Federally-qualified health center serv-
ices.’’.
(b) CONTINUED MEDICAID ELIGIBILITY FOR UP TO
1 YEAR.—Section 1902(e)(2) of such Act (42 U.S.C.
1396a(e)(2)) is amended—
(1) in subparagraph (A)—
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(A) by inserting ‘‘or with a community
health authority under a demonstration project
under section 1931’’ after ‘‘section 1876’’, and
(B) by striking ‘‘such organization or en-
tity’’ and inserting ‘‘such organization, entity,
or authority’’; and
(2) in subparagraph (B), by striking ‘‘effec-
tive.’’ and inserting the following: ‘‘effective (or, in
the case of an individual enrolled with a community
health authority under a demonstration project
under section 1931, of not more than 1 year begin-
ning on the date the individual’s enrollment with the
authority becomes effective).’’.
(c) EXCEPTION TO ANTI-KICKBACK LAW.—Section
1128B(b)(3) of such Act (42 U.S.C. 1320a–7b(b)(3)) is
amended—
(1) by striking ‘‘and’’ at the end of subpara-
graph (D),
(2) by striking the period at the end of sub-
paragraph (E) and inserting ‘‘; and’’, and
(3) by adding at the end the following new sub-
paragraph:
‘‘(F) any remuneration paid, or received, by a
Federally qualified health center, rural health clinic,
or other entity which is a participating provider
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•HR 3955 SC2
under a demonstration project under section 1931 as
part of an arrangement for the procurement of
goods or services or the referral of patients or the
lease or purchase of space or equipment.’’.
(d) EFFECTIVE DATE.—The amendments made by
this section shall apply to calendar quarters beginning on
or after October 1, 1994.
SEC. 5002. HEALTH CENTER PROGRAM AMENDMENTS.
(a) AUTHORIZATION OF GRANTS FOR NETWORK DE-
VELOPMENT.—
(1) MIGRANT HEALTH CENTERS.—Section 329
of the Public Health Service Act (42 U.S.C. 254b)
is amended by adding at the end the following:
‘‘(j)(1) The Secretary may make a grant, to an entity
receiving a grant under this section or to a group of such
entities, to support the planning and development of
health service networks (as defined in paragraph (3))
which will serve high impact areas, medically underserved
areas, or medically underserved populations within the
area they serve (or propose to serve).
‘‘(2) A grant under this subsection for the planning
and development of a health service network may be used
for the following costs:
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•HR 3955 SC2
‘‘(A) The costs of developing the network cor-
porate entity, including planning and needs assess-
ment.
‘‘(B) The costs of developing internal manage-
ment for the network, as well as costs of developing
legal, financial, clinical, information, billing, and re-
porting systems, and other costs necessary to
achieve operational status.
‘‘(C) The costs of recruitment, training, and
compensation of management staff of the network
and, as appropriate and necessary, the management
and clinical staff of any participating provider.
‘‘(D) The costs of developing additional primary
health and related service sites, including costs relat-
ed to purchase of essential equipment, acquisition,
modernization, expansion, or, if cost-effective, con-
struction of facilities.
‘‘(3) In this subsection, the term ‘health service net-
work’ means a nonprofit private entity that—
‘‘(A) through its participating providers (which
may provide services directly or through contract)
assures the provision of primary health and related
services and, as appropriate, supplemental health
services to residents of the high impact area or
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•HR 3955 SC2
medically underserved area or members of the medi-
cally underserved population covered by the network,
‘‘(B) includes, as participating providers, at
least all recipients of grants under this section or
section 330, 340, or 340A that provide primary
health and related services to the residents of the
area it serves (or proposes to serve), and that may
include, at the entity’s option, any other providers of
primary health or supplemental health services to
residents of the high impact area or medically un-
derserved area or members of the medically under-
served population covered by the network, but only
if such participating providers agree to provide serv-
ices without regard to an individual’s ability to pay,
and
‘‘(C) is governed by individuals a majority of
whom are patients, employees, or board members of
its participating providers that receive grants under
this section or section 330, 340, or 340A.’’.
(2) COMMUNITY
HEALTH
CENTERS.—Section
330 of such Act (42 U.S.C. 254c) is amended by
adding at the end the following:
‘‘(l)(1) The Secretary may make a grant, to an entity
receiving a grant under this section or to a group of such
entities, to support the planning and development of
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health service networks (as defined in section 329(j)(3))
which will serve high impact areas, medically underserved
areas, or medically underserved populations within the
area they serve (or propose to serve).
‘‘(2) A grant under this subsection for the planning
and development of a health service network may be used
for the costs described in section 329(j)(2).’’.
(3) EFFECTIVE DATE.—The amendments made
by this subsection shall take effect on the date of the
enactment of this Act.
(b) EXTENSION OF AUTHORIZATION OF APPROPRIA-
TIONS.—
(1) 
MIGRANT
HEALTH
CENTERS.—Section
329(h)(1)(A) of such Act (42 U.S.C. 254b(h)(1)(A))
is amended—
(A) by inserting ‘‘and subsection (j)’’ after
‘‘through (e)’’, and
(B) by striking ‘‘1994’’ and inserting
‘‘1999’’.
(2) COMMUNITY
HEALTH
CENTERS.—Section
330(g)(1)(A) of such Act (42 U.S.C. 254c(g)(1)(A))
is amended by striking ‘‘1994’’ and inserting
‘‘1999’’.
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Subtitle B—Expansion of Public
Health Programs on Preventive
Health
SEC. 5101. IMMUNIZATIONS AGAINST VACCINE-PREVENT-
ABLE DISEASES.
Section 317(j)(1) of the Public Health Service Act
(42 U.S.C. 247b(j)(1)), as redesignated by section
301(b)(1) of Public Law 103–183 (107 Stat. 2235), is
amended by striking ‘‘through 1995’’ and inserting
‘‘through 1999’’.
SEC. 5102. PREVENTION, CONTROL, AND ELIMINATION OF
TUBERCULOSIS.
Section 317E(g) of the Public Health Service Act (42
U.S.C. 247b–6(g)), as added by section 301(a) of Public
Law 103–183 (107 Stat. 2234), is amended—
(1) in paragraph (1)(A), by striking ‘‘through
1998’’ and inserting ‘‘through 1999’’; and
(2) in paragraph (2), by striking ‘‘through
1998’’ and inserting ‘‘through 1999’’.
SEC. 5103. LEAD POISONING PREVENTION.–
Section 317A(l)(1) of the Public Health Service Act
(42 U.S.C. 247b–1(l)(1)) is amended by striking ‘‘through
1997’’ and inserting ‘‘through 1999’’.
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SEC. 5104. PREVENTIVE HEALTH MEASURES WITH RE-
SPECT TO BREAST AND CERVICAL CANCERS.
Section 1510(a) of the Public Health Service Act (42
U.S.C. 300n–5(a)), as redesignated by section 102(a)(1)
of Public Law 103–183 (107 Stat. 2229) and amended
by section 103 of such Public Law (107 Stat. 2230), is
amended by striking ‘‘through 1998’’ and inserting
‘‘through 1999.’’.
SEC. 5105. OFFICE OF DISEASE PREVENTION AND HEALTH
PROMOTION.
(a) IN GENERAL.—Section 1701(b) of the Public
Health Service Act (42 U.S.C. 300u(b)) is amended by
striking ‘‘through 1996’’ and inserting ‘‘through 1999’’.
(b) PROMOTION OF INDIVIDUAL RESPONSIBILITY.—
Section 1701(a)(11) of such Act (42 U.S.C. 300u(a)(11))
is amended—
(1) by striking ‘‘and’’ at the end of subpara-
graph (C),
(2) by redesignating subparagraph (D) as sub-
paragraph (E), and
(3) by inserting after subparagraph (C) the fol-
lowing new subparagraph:
‘‘(D) promote individual responsibility in
personal health care and in the use of valuable
health care resources; and’’.
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(c) MINORITY HEALTH.—Section 1707(f) of such Act
(42 U.S.C. 300u–6(f)) is amended by striking ‘‘1993.’’
and inserting ‘‘1993, $35,000,000 for each of the fiscal
years 1994 through 1996, and such sums as may be nec-
essary for each of the fiscal years 1997 through 1999.’’.
SEC. 5106. PREVENTIVE HEALTH AND HEALTH SERVICES
BLOCK GRANT.
Section 1901(a) of the Public Health Service Act (42
U.S.C. 300w(a)) is amended by striking ‘‘through 1997’’
and inserting ‘‘through 1999’’.
TITLE VI—ANTITRUST
PROVISIONS
SEC. 6001. PUBLICATION OF ANTITRUST GUIDELINES ON
ACTIVITIES OF HEALTH PLANS.
(a) IN GENERAL.—The Attorney General shall pro-
vide for the development and publication of explicit guide-
lines on the application of antitrust laws to the activities
of health plans. The guidelines shall be designed to facili-
tate the development and operation of plans, consistent
with the antitrust laws.
(b) REVIEW PROCESS.—The Attorney General shall
establish a review process under which the administrator
or sponsor of a health plan (or organization that proposes
to administer or sponsor a health plan) may submit a re-
quest to Attorney General to obtain a prompt opinion (but
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•HR 3955 SC2
in no event later than 90 days after the Attorney General
receives the request) from the Department of Justice on
the plan’s conformity with the Federal antitrust laws.
(c) DEFINITIONS.—In this section—
(1) the term ‘‘antitrust laws’’—
(A) has the meaning given it in subsection
(a) of the first section of the Clayton Act (15
U.S.C. 12(a)), except that such term includes
section 5 of the Federal Trade Commission Act
(15 U.S.C. 45) to the extent such section ap-
plies to unfair methods of competition, and
(B) includes any State law similar to the
laws referred to in subparagraph (A); and
(2) the term ‘‘health plan’’ means any contract
or arrangement under which an entity bears all or
part of the cost of providing health care items and
services, including a hospital or medical expense in-
curred policy or certificate, hospital or medical serv-
ice plan contract, or health maintenance subscriber
contract, but does not include—
(A) coverage only for accident, dental, vi-
sion, disability, or long term care, medicare
supplemental health insurance, or any combina-
tion thereof,
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•HR 3955 SC2
(B) coverage issued as a supplement to li-
ability insurance,
(C) workers’ compensation or similar in-
surance, or
(D) automobile medical-payment insur-
ance.
SEC. 6002. ISSUANCE OF HEALTH CARE CERTIFICATES OF
PUBLIC ADVANTAGE.
(a) ISSUANCE AND EFFECT OF CERTIFICATE.—The
Attorney General, after consultation with the Secretary of
Health and Human Services, shall issue in accordance
with this section a certificate of public advantage to each
eligible health care collaborative activity that complies
with the requirements in effect under this section on or
after the expiration of the 1-year period that begins on
the date of the enactment of this Act (without regard to
whether or not the Attorney General has promulgated reg-
ulations to carry out this section by such date). Such ac-
tivity, and the parties to such activity, shall not be liable
under any of the antitrust laws for conduct described in
such certificate and engaged in by such activity if such
conduct occurs while such certificate is in effect.
(b) REQUIREMENTS APPLICABLE TO ISSUANCE OF
CERTIFICATES.—
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(1) STANDARDS
TO
BE
MET.—The Attorney
General shall issue a certificate to an eligible health
care collaborative activity if the Attorney General
finds that—
(A) the benefits that are likely to result
from carrying out the activity outweigh the re-
duction in competition (if any) that is likely to
result from the activity, and
(B) such reduction in competition is rea-
sonably necessary to obtain such benefits.
(2) FACTORS TO BE CONSIDERED.—
(A) WEIGHING OF BENEFITS AGAINST RE-
DUCTION
IN
COMPETITION.—For purposes of
making the finding described in paragraph
(1)(A), the Attorney General shall consider
whether the activity is likely—
(i) to maintain or to increase the
quality of health care,
(ii) to increase access to health care,
(iii) to achieve cost efficiencies that
will be passed on to health care consumers,
such as economies of scale, reduced trans-
action costs, and reduced administrative
costs,
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(iv) to preserve the operation of
health care facilities located in underserved
geographical areas,
(v) to improve utilization of health
care resources, and
(vi) to reduce inefficient health care
resource duplication.
(B) NECESSITY OF REDUCTION IN COM-
PETITION.—For purposes of making the finding
described in paragraph (1)(B), the Attorney
General shall consider—
(i) the ability of the providers of
health care services that are (or likely to
be) affected by the health care collabo-
rative activity and the entities responsible
for making payments to such providers to
negotiate societally optimal payment and
service arrangements,
(ii) the effects of the health care col-
laborative activity on premiums and other
charges imposed by the entities described
in clause (i), and
(iii) the availability of equally effi-
cient, less restrictive alternatives to achieve
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the benefits that are intended to be
achieved by carrying out the activity.
(c) ESTABLISHMENT
OF CRITERIA
AND PROCE-
DURES.—Subject to subsections (d) and (e), not later than
1 year after the date of the enactment of this Act, the
Attorney General and the Secretary shall establish jointly
by rule the criteria and procedures applicable to the issu-
ance of certificates under subsection (a). The rules shall
specify the form and content of the application to be sub-
mitted to the Attorney General to request a certificate,
the information required to be submitted in support of
such application, the procedures applicable to denying and
to revoking a certificate, and the procedures applicable to
the administrative appeal (if such appeal is authorized by
rule) of the denial and the revocation of a certificate. Such
information may include the terms of the health care col-
laborative activity (in the case of an activity in existence
as of the time of the application) and implementation plan
for the collaborative activity.
(d) ELIGIBLE HEALTH CARE COLLABORATIVE AC-
TIVITY.—To be an eligible health care collaborative activ-
ity for purposes of this section, a health care collaborative
activity shall submit to the Attorney General an applica-
tion that complies with the rules in effect under subsection
(c) and that includes—
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(1) an agreement by the parties to the activity
that the activity will not foreclose competition by en-
tering into contracts that prevent health care provid-
ers from providing health care in competition with
the activity,
(2) an agreement that the activity will submit
to the Attorney General annually a report that de-
scribes the operations of the activity and information
regarding the impact of the activity on health care
and on competition in health care, and
(3) an agreement that the parties to the activity
will notify the Attorney General and the Secretary of
the termination of the activity not later than 30
days after such termination occurs.
(e) REVIEW OF APPLICATIONS FOR CERTIFICATES.—
Not later than 30 days after an eligible health care col-
laborative activity submits to the Attorney General an ap-
plication that complies with the rules in effect under sub-
section (c) and with subsection (d), the Attorney General
shall issue or deny the issuance of such certificate. If, be-
fore the expiration of such 30-day period, the Attorney
General fails to issue or deny the issuance of such certifi-
cate, the Attorney General shall be deemed to have issued
such certificate.
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(f) REVOCATION OF CERTIFICATE.—Whenever the
Attorney General finds that a health care collaborative ac-
tivity with respect to which a certificate is in effect does
not meet the standards specified in subsection (b), the At-
torney General shall revoke such certificate.
(g) WRITTEN REASONS; JUDICIAL REVIEW.—
(1) DENIAL
AND
REVOCATION
OF
CERTIFI-
CATES.—If the Attorney General denies an applica-
tion for a certificate or revokes a certificate, the At-
torney General shall include in the notice of denial
or revocation a statement of the reasons relied upon
for the denial or revocation of such certificate.
(2) JUDICIAL REVIEW.—
(A) AFTER
ADMINISTRATIVE
PROCEED-
ING.—(i) If the Attorney General denies an ap-
plication submitted or revokes a certificate is-
sued under this section after an opportunity for
hearing on the record, then any party to the
health care collaborative activity involved may
commence a civil action, not later than 60 days
after receiving notice of the denial or revoca-
tion, in an appropriate district court of the
United States for review of the record of such
denial or revocation.
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(ii) As part of the Attorney General’s an-
swer, the Attorney General shall file in such
court a certified copy of the record on which
such denial or revocation is based. The findings
of fact of the Attorney General may be set aside
only if found to be unsupported by substantial
evidence in such record taken as a whole.
(B) DENIAL OR REVOCATION WITHOUT AD-
MINISTRATIVE
PROCEEDING.—If the Attorney
General denies an application submitted or re-
vokes a certificate issued under this section
without an opportunity for hearing on the
record, then any party to the health care col-
laborative activity involved may commence a
civil action, not later than 60 days after receiv-
ing notice of the denial or revocation, in an ap-
propriate district court of the United States for
de novo review of such denial or revocation.
(h) EXEMPTION.—A person shall not be liable under
any of the antitrust laws for conduct necessary—
(1) to prepare, agree to prepare, or attempt to
agree to prepare an application to request a certifi-
cate under this section, or
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(2) to attempt to enter into any health care col-
laborative activity with respect to which such a cer-
tificate is in effect.
(i) DEFINITIONS.—In this section:
(1) The term ‘‘antitrust laws’’ has the meaning
given it in section 6001(c)(1).
(2) The term ‘‘certificate’’ means a certificate
of public advantage authorized to be issued under
subsection (a).
(3) The term ‘‘health care collaborative activ-
ity’’ means an agreement (whether existing or pro-
posed) between 2 or more providers of health care
services that is entered into solely for the purpose of
sharing in the provision of health care services and
that involves substantial integration or financial
risk-sharing between the parties, but does not in-
clude the exchanging of information, the entering
into of any agreement, or the engagement in any
other conduct that is not reasonably required to
carry out such agreement.
(4) The term ‘‘health care services’’ includes
services related to the delivery or administration of
health care services.
(5) The term ‘‘liable’’ means liable for any civil
or criminal violation of the antitrust laws.
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(6) The term ‘‘provider of health care services’’
means any individual or entity that is engaged in the
delivery of health care services in a State and that
is required by State law or regulation to be licensed
or certified by the State to engage in the delivery of
such services in the State.
TITLE 
VII—PREFUNDING 
GOV-
ERNMENT HEALTH BENEFITS
FOR CERTAIN ANNUITANTS
SEC. 
7001. 
REQUIREMENT 
THAT 
CERTAIN 
AGENCIES
PREFUND GOVERNMENT HEALTH BENEFITS
CONTRIBUTIONS FOR THEIR ANNUITANTS.
(a) DEFINITIONS.—For the purpose of this section—
(1) the term ‘‘agency’’ means any agency or
other instrumentality within the executive branch of
the Government, the receipts and disbursements of
which are not generally included in the totals of the
budget of the United States Government submitted
by the President;
(2) the term ‘‘health benefits plan’’ means, with
respect to an agency, a health benefits plan, estab-
lished by or under Federal law, in which employees
or annuitants of such agency may participate;
(3) the term ‘‘health-benefits coverage’’ means
coverage under a health benefits plan’’;
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(4) an individual shall be considered to be an
‘‘annuitant of an agency’’ if such individual is enti-
tled to an annuity, under a retirement system estab-
lished by or under Federal law, by virtue of—
(A) such individual’s service with, and sep-
aration from, such agency; or
(B) being the survivor of an annuitant
under subparagraph (A) or of an individual who
died while employed by such agency; and
(5) the term ‘‘Office’’ means the Office of Per-
sonnel Management.
(b) PREFUNDING REQUIREMENT.—
(1) IN GENERAL.—Effective as of October 1,
1994, each agency (or February 1, 1995, in the case
of the agency with the greatest number of employ-
ees, as determined by the Office) shall be required
to prepay the Government contributions which are
or will be required in connection with providing
health-benefits coverage for annuitants of such
agency.
(2) REGULATIONS.—The Office shall prescribe
such regulations as may be necessary to carry out
this section. The regulations shall be designed to en-
sure at least the following:
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(A) Amounts paid by each agency shall be
sufficient to cover the amounts which would
otherwise be payable by such agency (on a
‘‘pay-as-you-go’’ basis), on or after the applica-
ble effective date under paragraph (1), on be-
half of—
(i) individuals who are annuitants of
the agency as of such effective date; and
(ii) individuals who are employed by
the agency as of such effective date, or
who become employed by the agency after
such effective date, after such individuals
have become annuitants of the agency (in-
cluding their survivors).
(B)(i) For purposes of determining any
amounts payable by an agency—
(I) this section shall be treated as if
it had taken effect at the beginning of the
20-year period which ends on the effective
date applicable under paragraph (1) with
respect to such agency; and
(II) in addition to any amounts pay-
able under subparagraph (A), each agency
shall also be responsible for paying any
amounts for which it would have been re-
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sponsible, with respect to the 20-year pe-
riod described in subclause (I), in connec-
tion with any individuals who are annu-
itants or employees of the agency as of the
applicable effective date under paragraph
(1).
(ii) Any amounts payable under this sub-
paragraph for periods preceding the applicable
effective date under paragraph (1) shall be pay-
able in equal installments over the 20-year pe-
riod beginning on such effective date.
(c) FASB STANDARDS.—Regulations under sub-
section (b) shall be in conformance with the provisions of
Standard 106 of the Financial Accounting Standards
Board, issued in December 1990.
(d) CLARIFICATION.—Nothing in this section shall be
considered to permit or require duplicative payments on
behalf of any individuals.
(e) DRAFT LEGISLATION.—The Office shall prepare
and submit to Congress any draft legislation which may
be necessary in order to carry out this section.
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