293
Subtitle E
‘‘(D) Performing inspections and other
evaluations relating to the medicare program.
‘‘(E) Conducting provider and conumer
education activities regarding the requirements
of this title.
‘‘(3) AMOUNTS
SPECIFIED.—The amount ap-
propriated under paragraph (1) for a fiscal year is
as follows:
‘‘(A) For fiscal year 1996, such amount
shall be $130,000,000.
‘‘(B) For fiscal year 1997, such amount
shall be $181,000,000.
‘‘(C) For fiscal year 1998, such amount
shall be $204,000,000.
‘‘(D) For each subsequent fiscal year, the
amount appropriated for the previous fiscal
year, increased by the percentage increase in
aggregate expenditures under this title for the
fiscal year involved over the previous fiscal year.
‘‘(4) ALLOCATION OF PAYMENTS AMONG TRUST
FUNDS.—The appropriations made under paragraph
(1) shall be in an allocation as reasonably reflects
the proportion of such expenditures associated with
part A and part B.’’.
294
Subtitle E
SEC. 
15406. 
FRAUD 
REDUCTION 
DEMONSTRATION
PROJECT.
(a) IN GENERAL.—Not later than July 1, 1996, the
Secretary of Health and Human Services (in this section
referred to as the ‘‘Secretary’’) shall establish not less
than three demonstration projects under which organiza-
tions with a contract under section 1816 or section 1842
of the Social Security Act—
(1) identify practitioners and providers whose
patterns of providing care to beneficiaries enrolled
under title XVIII of the Social Security Act are con-
sistently outside the norm for other practitioners or
providers of the same category, class, or type, and
(2) experiment with ways of identifying fraudu-
lent claims submitted to the program established
under such title before they are paid.
(b) DURATION OF PROJECTS.—Each project estab-
lished under subsection (a) shall last for at least 18
months and shall focus on those categories, classes, or
types of providers and practitioners that have been identi-
fied by the Inspector General of the Department of Health
and Human Services as having a high incidence of fraud
and abuse.
(c) REPORT.—Not later than July 1, 1997, the Sec-
retary shall report to the Congress on the demonstration
projects established under subsection (a), and shall include
295
Subtitle F, Part 1
in the report an assessment of the effectiveness of, and
any recommended legislative changes based on, the
projects.
SEC. 15407. REPORT ON COMPETITIVE PRICING.
Not later than 1 year after the date of the enactment
of this Act, the Secretary of Health and Human Services
(acting through the Administrator of the Health Care Fi-
nancing Administration) shall submit to Congress a report
recommending legislative changes to the medicare pro-
gram to enable the prices paid for items and services
under the medicare program to be established on a more
competitive basis.
Subtitle F—Improving Access to
Health Care
PART 1—IMPROVING ACCESS TO HEALTH CARE
IN RURAL AREAS
SEC. 
15501. 
COMMUNITY 
RURAL 
HEALTH 
NETWORK
GRANTS.
(a) ASSISTANCE
FOR DEVELOPMENT
OF ACCESS
PLANS FOR CHRONICALLY UNDERSERVED AREAS.—
(1) AVAILABILITY OF FINANCIAL ASSISTANCE
TO
IMPLEMENT
ACTION
PLANS
TO
INCREASE
AC-
CESS.—
(A) IN
GENERAL.—The Secretary shall
provide grants (in amounts determined in ac-
296
Subtitle F, Part 1
cordance with subparagraph (C)) over a 3-year
period to an eligible State for the development
of plans to increase access to health care serv-
ices during such period for residents of areas in
the State that are designated as chronically un-
derserved areas in accordance with paragraph
(2).
(B) 
ELIGIBILITY
REQUIREMENTS.—A
State is eligible to receive grants under this sec-
tion if the State submits to the Secretary (at
such time and in such form as the Secretary
may require) assurances that the State has de-
veloped (or is in the process of developing) a
plan to increase the access of residents of a
chronically underserved area to health care
services that meets the requirements of para-
graph (3), together with such other information
and assurances as the Secretary may require.
(C) AMOUNT OF ASSISTANCE.—
(i) IN
GENERAL.—Subject to clause
(ii), the amount of assistance provided to
a State under this subsection with respect
to any plan during a 3-year period shall be
equal to—
297
Subtitle F, Part 1
(I) for the first year of the pe-
riod, an amount equal to 100 percent
of the amounts expended by the State
during the year to implement the plan
described in subparagraph (A) (as re-
ported to the Secretary in accordance
with such requirements as the Sec-
retary may impose);
(II) for the second year of the
period, an amount equal to 50 percent
of the amounts expended by the State
during the year to implement the
plan; and
(III) for the third year of the pe-
riod, an amount equal to 33 percent
of the amounts expended by the State
during the year to implement the
plan.
(ii) AGGREGATE PER PLAN LIMIT.—
The amount of assistance provided to a
State under this paragraph with respect to
any plan may not exceed $100,000 during
any year of the 3-year period for which the
State receives assistance.
(2) DESIGNATION OF AREAS.—
298
Subtitle F, Part 1
(A) DESIGNATION BY GOVERNOR.—In ac-
cordance with the guidelines developed under
subparagraph (B), the Governor of a State may
designate an area in the State as a chronically
underserved area for purposes of this section
upon the request of a local official of the area
or upon the Governor’s initiative.
(B) GUIDELINES FOR DESIGNATION.—
(i) DEVELOPMENT BY SECRETARY.—
Not later than 1 year after the date of the
enactment of this Act, the Secretary shall
develop guidelines for the designation of
areas as chronically underserved areas
under this subsection.
(ii) FACTORS CONSIDERED IN DEVEL-
OPMENT
OF
GUIDELINES.—In developing
guidelines under subparagraph (A), the
Secretary shall consider the following fac-
tors:
(I) Whether the area (or a sig-
nificant portion of the area)—
(aa) is designated as a
health professional shortage area
(under section 332(a) of the Pub-
lic Health Service Act), or meets
299
Subtitle F, Part 1
the criteria for designation as
such an area; or
(bb) was previously des-
ignated as such an area or pre-
viously met such criteria for an
extended period prior to the des-
ignation of the area under this
subsection (in accordance with
criteria established by the Sec-
retary).
(II) The availability and ade-
quacy of health care providers and fa-
cilities for residents of the area.
(III) The extent to which the
availability of assistance under other
Federal and State programs has failed
to alleviate the lack of access to
health care services for residents of
the area.
(IV) The percentage of residents
of the area whose income is at or
below the poverty level.
(V) The percentage of residents
of the area who are age 65 or older.
300
Subtitle F, Part 1
(VI) The existence of cultural or
geographic barriers to access to health
care services in the area, including
weather conditions.
(C) REVIEW BY SECRETARY.—No designa-
tion under subparagraph (A) shall take effect
under this subsection unless the Secretary—
(i) has been notified of the proposed
designation; and
(ii) has not, within 60 days after the
date of receipt of the notice, disapproved
the designation.
(D) PERIOD OF DESIGNATION.—A designa-
tion under this subsection shall be effective dur-
ing a period specified by the Governor of not
longer than 3 years. The Governor may extend
the designation for additional 3-year periods,
except that a State may not receive assistance
under paragraph (1)(C) for amounts expended
during any such additional periods.
(3) 
REQUIREMENTS
FOR
STATE
ACCESS
PLANS.—A State plan to increase the access of resi-
dents of chronically underserved areas to health care
services meets the requirements of this subsection if
the Secretary finds that the plan was developed with
301
Subtitle F, Part 1
the participation of health care providers and facili-
ties and residents of the area that is the subject of
the plan, together with such other requirements as
the Secretary may impose.
(4) AUTHORIZATION
OF
APPROPRIATIONS.—
There are authorized to be appropriated for assist-
ance under this subsection $10,000,000 for each of
the first 3 fiscal years beginning after the date on
which the Secretary develops guidelines for the des-
ignation of areas as chronically underserved areas
under paragraph (2)(B).
(b) TECHNICAL ASSISTANCE GRANTS
FOR NET-
WORKS.—
(1) IN GENERAL.—The Secretary shall make
funds available under this subsection to provide
technical assistance (including information regarding
eligibility for other Federal programs) and advice for
entities described in paragraph (2) seeking to estab-
lish or enhance a community rural health network in
an underserved rural area.
(2) ENTITIES ELIGIBLE TO RECEIVE FUNDS.—
The following entities are eligible to receive funds
for technical assistance under this subsection:
(A) An entity receiving a grant under sub-
section (c).
302
Subtitle F, Part 1
(B) A State or unit of local government.
(C) An entity providing health care serv-
ices (including health professional education
services) in the area involved.
(3) USE OF FUNDS.—
(A) IN GENERAL.—Funds made available
under this subsection may be used—
(i) for planning a community rural
health network and the submission of the
plan for the network to the Secretary
under subsection (c)(3) (subject to the lim-
itation described in subparagraph (B));
(ii) to provide assistance in conduct-
ing 
community-based 
needs 
and
prioritization, identifying existing regional
health resources, and developing networks,
utilizing existing local providers and facili-
ties where appropriate;
(iii) to provide advice on obtaining the
proper balance of primary and secondary
facilities for the population served by the
network;
(iv) to provide assistance in coordinat-
ing arrangements for tertiary care;
303
Subtitle F, Part 1
(v) to provide assistance in recruit-
ment and retention of health care profes-
sionals;
(vi) to provide assistance in coordinat-
ing the delivery of emergency services with
the provision of other health care services
in the area served by the network;
(vii) to provide assistance in coordi-
nating arrangements for mental health and
substance abuse treatment services; and
(viii) to provide information regarding
the area or proposed network’s eligibility
for Federal and State assistance for health
care-related activities, together with infor-
mation on funds available through private
sources.
(B) LIMITATION ON AMOUNT AVAILABLE
FOR
DEVELOPMENT
OF
NETWORK.—The
amount of financial assistance available for ac-
tivities described in subparagraph (A) may not
exceed $50,000 and may not be available for a
period of time exceeding 1 year.
(4) USE OF RURAL HEALTH OFFICES.—In car-
rying out this subsection with respect to entities in
rural areas, the Secretary shall make funds available
304
Subtitle F, Part 1
through the State offices of rural health or through
appropriate entities designated by such offices.
(5) AUTHORIZATION
OF
APPROPRIATIONS.—
There 
are 
authorized 
to 
be 
appropriated
$10,000,000 for each of fiscal years 1996 through
2000 to carry out this section. Amounts appro-
priated under this subsection shall be available until
expended.
(c) DEVELOPMENT GRANTS FOR NETWORKS.—
(1) IN GENERAL.—The Secretary shall provide
financial assistance to eligible entities for the pur-
pose of providing for the development and implemen-
tation of community rural health networks (as de-
fined in subsection (d)). In providing such assist-
ance, the Secretary shall give priority to eligible enti-
ties that will carry out such purpose in States that
have developed a plan under subsection (a).
(2) ELIGIBLE ENTITIES.—
(A) IN GENERAL.—An entity is eligible to
receive financial assistance under this sub-
section only if the entity meets the require-
ments of clauses (i) through (iii) as follows:
(i) The entity—
(I) is based in a rural area;
305
Subtitle F, Part 1
(II) is described in subparagraph
(B), 
(C), 
or 
(D) 
of 
subsection
(b)(2);or
(III) is a hospital-affiliated pri-
mary care center (as defined in sub-
section (d)).
(ii) The entity is undertaking to de-
velop and implement a community rural
health network in one or more underserved
rural areas (as defined in subsection (d))
with the active participation of at least 3
health care providers or facilities in the
area.
(iii) The entity has consulted with the
local governments of the area to be served
by the network and with individuals who
reside in the area.
(B) COORDINATION WITH PROVIDERS OUT-
SIDE
OF
AREA
PERMITTED.—Nothing in this
subsection shall be construed as preventing an
entity that coordinates the delivery of services
in an underserved rural area with an entity out-
side the area from qualifying for financial as-
sistance under this section, or as preventing an
entity consisting of a consortia of members lo-
306
Subtitle F, Part 1
cated in adjoining States from qualifying for
such assistance.
(C) PERMITTING ENTITIES NOT RECEIVING
FUNDING FOR DEVELOPMENT OF PLAN TO RE-
CEIVE
FUNDING
FOR
IMPLEMENTATION.—An
entity that is eligible to receive financial assist-
ance under this subsection may receive assist-
ance to carry out activities described in para-
graph (3)(A)(ii) notwithstanding that the entity
does not receive assistance to carry out activi-
ties described in paragraph (c)(A)(i).
(3) USE OF FUNDS.—
(A) IN
GENERAL.—Financial assistance
made available to eligible entities under this
subsection may be used only—
(ii) for the development of a commu-
nity health network and the submission of
the plan for the network to the Secretary;
and
(ii) after the Secretary approves the
plan for the network, for activities to im-
plement the network, including (but not
limited to)—
(I) establishing information sys-
tems, including telecommunications,
307
Subtitle F, Part 1
(II) recruiting health care provid-
ers,
(III) providing services to enable
individuals to have access to health
care services, including transportation
and language interpretation services
(including interpretation services for
the hearing-impaired), and
(IV) establishing and operating a
community health advisor program
described in subparagraph (B).
(B) COMMUNITY
HEALTH
ADVISOR
PRO-
GRAM.—
(i) PROGRAM
DESCRIBED.—In sub-
paragraph (A), a ‘‘community health advi-
sor program’’ is a program under which
community health advisors carry out the
following activities:
(I) Collaborating efforts with
health care providers and related enti-
ties to facilitate the provision of
health services and health-related so-
cial services.
(II) Providing public education
on health promotion and disease pre-
308
Subtitle F, Part 1
vention and efforts to facilitate the
use of available health services and
health-related social services.
(III) 
Providing 
health-related
counseling.
(IV) Making referrals for avail-
able health services and health-related
social services.
(V) Improving the ability of indi-
viduals to use health services and
health-related social services under
Federal, State, and local programs
through assisting individuals in estab-
lishing eligibility under the programs.
(VI) Providing outreach services
to inform the community of the avail-
ability of the services provided under
the program.
(ii) COMMUNITY
HEALTH
ADVISOR
DEFINED.—In clause (i), the term ‘‘com-
munity health advisor’’ means, with re-
spect to a community health advisor pro-
gram, an individual—
(I) who has demonstrated the ca-
pacity to carry out one or more of the
309
Subtitle F, Part 1
activities carried out under the pro-
gram; and
(II) who, for not less than one
year, has been a resident of the com-
munity in which the program is to be
operated.
(C) LIMITATIONS
ON
ACTIVITIES
FUND-
ED.—Financial assistance made available under
this subsection may not be used for any of the
following:
(i) For a telecommunications system
unless such system is coordinated with,
and does not duplicate, a system existing
in the area.
(ii) For construction or remodeling of
health care facilities.
(D) LIMITATION ON AMOUNT AVAILABLE
FOR
DEVELOPMENT
OF
NETWORK.—The
amount of financial assistance available for ac-
tivities described in subparagraph (A)(i) may
not exceed $50,000 and may not be made avail-
able for a period of time exceeding 1 year.
(4) APPLICATION.—
(A) IN GENERAL.—No financial assistance
shall be provided under this section to an entity
310
Subtitle F, Part 1
unless the entity has submitted to the Sec-
retary, in a time and manner specified by the
Secretary, and had approved by the Secretary
an application.
(B) INFORMATION
TO
BE
INCLUDED.—
Each such application shall include—
(i) a description of the community
rural health network, including service
area and capacity, and
(ii) a description of how the proposed
network will utilize existing health care fa-
cilities in a manner that avoids unneces-
sary duplication.
(5) AUTHORIZATION OF APPROPRIATIONS.—
(A) IN GENERAL.—There are authorized to
be appropriated $100,000,000 for each of fiscal
years 1996 through 2000 to carry out this sub-
section. Amounts appropriated under this sub-
section shall be available until expended.
(B) ANNUAL
LIMIT
ON
ASSISTANCE
TO
GRANTEE.—The amount of financial assistance
provided to an entity under this subsection dur-
ing a year may not exceed $250,000.
(d) DEFINITIONS.—
(1) IN GENERAL.—
311
Subtitle F, Part 1
(A) COMMUNITY
RURAL
HEALTH
NET-
WORK.—For purposes of this section, the term
‘‘community rural health network’’ means a for-
mal cooperative arrangement between partici-
pating hospitals, physicians, and other health
care providers which—
(i) is located in an underserved rural
area;
(ii) furnishes health care services to
individuals residing in the area; and
(iii) is governed by a board of direc-
tors selected by participating health care
providers and residents of the area.
(B) HOSPITAL-AFFILIATED PRIMARY CARE
CENTER.—
(i) IN
GENERAL.—For purposes of
this section, the term ‘‘hospital-affiliated
primary care center’’ means a distinct ad-
ministrative unit of a community hospital
(as defined in clause (ii)) meeting the fol-
lowing requirement:
(I) The unit is located in, or ad-
jacent to, the hospital.
(II) The unit delivers primary
health services, as defined in para-
312
Subtitle F, Part 1
graph (1) of section 330(b) of the
Public Health Service Act to a
catchment area determined by the
hospital and approved by the Sec-
retary.
(III) The unit provides referrals
to providers of supplemental health
services, as defined in paragraph (2)
of such section.
(IV) The services of the unit are
delivered through a primary care
group practice (as defined in clause
(iii)).
(V) To the extent practicable,
primary health services in the commu-
nity 
hospital 
are 
delivered 
only
through the unit.
(VI) Qualified personnel trained
in triage are placed in the unit, the
emergency room, and the outpatient
department to screen and direct pa-
tients to the appropriate location for
care.
(VII) Each patient of the unit
has an identified member of the group
313
Subtitle F, Part 1
practice responsible for continuous
management of the patient, including
emergency services and referrals of
the patients for inpatient or out-
patient services.
(VIII) To the extent practicable,
excess facilities and equipment in or
owned by the community hospital are
covered for use in the unit.
(IX) The unit and the hospital
avoid unnecessary duplication of fa-
cilities and equipment, except that the
unit may install appropriate support
equipment for routine primary health
services.
(X) The unit is maintained as a
separate and distinct cost and revenue
center for accounting purposes.
(XI) The unit is operated in ac-
cordance with all of the requirements
specified for community health centers
in section 330(e)(3) of the Public
Health Service Act (other than clause
(vii).
314
Subtitle F, Part 1
(XII) The hospital has an advi-
sory committee that—
(aa) is composed of individ-
uals a majority of whom are
health 
consumers 
in 
the
catchment area of the hospital;
and
(bb) meets at least 6 times a
year to review the operations of
the primary care center and de-
velop recommendations to the
governing board of the hospital
about the operation of the center
and the types of services to be
provided.
(XIII) The unit maintains an in-
formation program for its patients
that fully discloses—
(aa) the covered professional
services and referral capabilities
offered by the unit; and
(bb) the method by which
patients of the unit may resolve
grievances about billing for cov-
315
Subtitle F, Part 1
ered professional services and the
quality of such services.
(ii) COMMUNITY HOSPITAL.—For pur-
poses of this section, the term ‘‘community
hospital’’ means a public general hospital,
owned and operated by a State, county or
local unit of government, or a private com-
munity hospital that—
(i) has less than 50 beds; and
(ii) primarily serves—
(I) a medically underserved popu-
lation, as defined in section 330(b)(3)
of the Public Health Service Act; or
(II) a health professional short-
age area, as defined in section
332(a)(1) of such Act.
(iii) PRIMARY
CARE
GROUP
PRAC-
TICE.—For purposes of this section, the
term ‘‘primary care group practice’’ means
any combination of 3 or more primary care
physicians who are—
(I) organized to provide primary
health services in a manner that is
consistent with the needs of the popu-
lation served;
316
Subtitle F, Part 1
(II) located in, or adjacent to,
the community hospital;
(III) who have admitting privi-
leges at the community hospital; and
(IV)(aa) who are salaried by the
hospital such that a majority of the
members of the group practice is full
time in the primary care center; or
(bb) who are organized into a
legal entity (partnership, corporation,
or professional association) that has a
contract approved by the Secretary
with the community hospital to pro-
vide primary health services.
(2) OTHER DEFINITIONS.—For purposes of this
section:
(A) The term ‘‘rural area’’ has the mean-
ing given such term in section 1886(d)(2)(D) of
the Social Security Act.
(B) The term ‘‘Secretary’’ means the Sec-
retary of Health and Human Services.
(C) The term ‘‘State’’ means each of the
several States, the District of Columbia, Puerto
Rico, the Virgin Islands, Guam, the Northern
Mariana Islands, and American Samoa.
317
Subtitle F, Part 1
(D) The term ‘‘underserved rural area’’
means a rural area designated—
(i) as a health professional shortage
area under section 332(a) of the Public
Health Service Act; or
(ii) as a chronically underserved area
under subsection (a).
SEC. 15502. PROVIDER INCENTIVES.
(a) ADDITIONAL PAYMENTS UNDER MEDICARE FOR
PHYSICIANS’ 
SERVICES
FURNISHED
IN
SHORTAGE
AREAS.—
(1) INCREASE IN AMOUNT OF ADDITIONAL PAY-
MENT.—Section 1833(m) (42 U.S.C. 1395l(m)) is
amended by striking ‘‘10 percent’’ and inserting ‘‘20
percent’’.
(2) RESTRICTION
TO
PRIMARY
CARE
SERV-
ICES.—Section 1833(m) (42 U.S.C. 1395l(m)) is
amended by inserting after ‘‘physicians’ services’’
the following: ‘‘consisting of primary care services
(as defined in section 1842(i)(4))’’.
(3) EXTENSION
OF
PAYMENT
FOR
FORMER
SHORTAGE AREAS.—
(A) IN
GENERAL.—Section 1833(m) (42
U.S.C. 1395l(m)) is amended by striking
‘‘area,’’ and inserting ‘‘area (or, in the case of
318
Subtitle F, Part 1
an area for which the designation as a health
professional shortage area under such section is
withdrawn, in the case of physicians’ services
furnished to such an individual during the 3-
year period beginning on the effective date of
the withdrawal of such designation),’’.
(B) EFFECTIVE
DATE.—The amendment
made by subparagraph (A) shall apply to physi-
cians’ services furnished in an area for which
the designation as a health professional short-
age area under section 332(a)(1)(A) of the
Public Health Service Act is withdrawn on or
after January 1, 1996.
(4) REQUIRING CARRIERS TO REPORT ON SERV-
ICES
PROVIDED.—Section 1842(b)(3) (42 U.S.C.
1395u(b)(3)) is amended—
(A) by striking ‘‘and’’ at the end of sub-
paragraph (I); and
(B) by inserting after subparagraph (I) the
following new subparagraph:
‘‘(J) will provide information to the Secretary
not later than 30 days after the end of the contract
year on the types of providers to whom the carrier
made additional payments during the year for cer-
tain 
physicians’ 
services 
pursuant 
to 
section
319
Subtitle F, Part 1
1833(m), together with a description of the services
furnished by such providers during the year; and’’.
(5) STUDY.—
(A) 
IN
GENERAL.—The 
Secretary 
of
Health and Human Services shall conduct a
study analyzing the effectiveness of the provi-
sion of additional payments under part B of the
medicare program for physicians’ services pro-
vided in health professional shortage areas in
recruiting and retaining physicians to provide
services in such areas.
(B) REPORT.—Not later than 1 year after
the date of the enactment of this Act, the Sec-
retary shall submit to Congress a report on the
study conducted under subparagraph (A), and
shall include in the report such recommenda-
tions as the Secretary considers appropriate.
(6) EFFECTIVE DATE.—The amendments made
by paragraphs (1), (2), and (4) shall apply to physi-
cians’ services furnished on or after January 1,
1996.
(b) DEVELOPMENT
OF MODEL STATE SCOPE
OF
PRACTICE LAW.—
(1) IN GENERAL.—The Secretary of Health and
Human Services shall develop and publish a model
320
Subtitle F, Part 1
law that may be adopted by States to increase the
access of individuals residing in underserved rural
areas to health care services by expanding the serv-
ices which non-physician health care professionals
may provide in such areas.
(2) DEADLINE.—The Secretary shall publish
the model law developed under paragraph (1) not
later than 1 year after the date of the enactment of
this Act.
SEC. 8503. MODIFICATIONS TO THE NATIONAL HEALTH
SERVICE CORPS.
(a) NATIONAL HEALTH SERVICE CORPS LOAN RE-
PAYMENTS EXCLUDED FROM GROSS INCOME.—
(1) IN GENERAL.—Part III of subchapter B of
chapter 1 of the Internal Revenue Code of 1986 (re-
lating to items specifically excluded from gross in-
come) is amended by redesignating section 137 as
section 138 and by inserting after section 136 the
following new section:
‘‘SEC. 137. NATIONAL HEALTH SERVICE CORPS LOAN RE-
PAYMENTS.
‘‘(a) GENERAL RULE.—Gross income shall not in-
clude any qualified loan repayment.
‘‘(b) QUALIFIED LOAN REPAYMENT.—For purposes
of this section, the term ‘qualified loan repayment’ means
321
Subtitle F, Part 1
any payment made on behalf of the taxpayer by the Na-
tional Health Service Corps Loan Repayment Program
under section 338B(g) of the Public Health Service Act.’’.
(2) CONFORMING AMENDMENT.—Paragraph (3)
of section 338B(g) of the Public Health Service Act
is amended by striking ‘‘Federal, State, or local’’
and inserting ‘‘State or local’’.
(3) CLERICAL AMENDMENT.—The table of sec-
tions for part III of subchapter B of chapter 1 of
the Internal Revenue Code of 1986 is amended by
striking the item relating to section 137 and insert-
ing the following:
‘‘Sec. 137. National Health Service Corps loan repayments.
‘‘Sec. 138. Cross references to other Acts.’’.
(4) EFFECTIVE DATE.—The amendments made
by this subsection shall apply to payments made
under section 338B(g) of the Public Health Service
Act after the date of the enactment of this Act.
(b) STUDY REGARDING DESIGNATION AS HEALTH
PROFESSIONAL SHORTAGE AREA; ALLOCATION OF CORPS
MEMBERS AMONG SHORTAGE AREAS.—
(1) IN GENERAL.—The Secretary of Health and
Human Services (in this subsection referred to as
the ‘‘Secretary’’) shall conduct a study for the pur-
pose of determining the following:
322
Subtitle F, Part 1
(A) With respect to the designation of
health professional shortage areas under sub-
part II of part D of title III of the Public
Health Service Act—
(i) whether the statutory and adminis-
trative criteria for the designation of such
areas should be modified to ensure that all
areas with significant shortages of health
professionals receive such a designation;
and
(ii) if so, the recommendations of the
Secretary for modifications in the criteria.
(B) With respect to the assignment of
members of the National Health Service Corps
under such subpart—
(i) whether the statutory and adminis-
trative criteria for the assignment of Corps
members should be modified in order to
ensure that the members are equitably al-
located among health professional shortage
areas; and
(ii) if so, the recommendations of the
Secretary for modifications in the criteria.
(2) REPORT.—Not later than May 1, 1996, the
Secretary shall complete the study required in para-
323
Subtitle F, Part 1
graph (1) and submit to the Congress a report de-
scribing the findings made in the study.
(c) OTHER
PROVISIONS
REGARDING
NATIONAL
HEALTH SERVICE CORPS.—
(1) PRIORITY IN ASSIGNMENT OF CORPS MEM-
BERS; COMMUNITY
RURAL
HEALTH
NETWORKS.—
Section 333A(a)(1)(B) of the Public Health Service
Act (42 U.S.C. 254f–1(a)(1)(B)) is amended—
(A) in clause (iii), by striking ‘‘and’’ after
the semicolon at the end;
(B) in clause (iv), by adding ‘‘and’’ after
the semicolon at the end; and
(B) by adding at the end the following
clause:
‘‘(v) is a participant in a community
rural health network, as defined in section
15501 of the Medicare Preservation Act of
1995.’’.
(2) 
ALLOCATION
FOR
PARTICIPATION
OF
NURSES
IN
SCHOLARSHIP
PROGRAM.—Section
338H(b)(2) of the Public Health Service Act (42
U.S.C. 254q(b)(2)) is amended by adding at the end
the following subparagraph:
‘‘(C) Of the amounts appropriated under
paragraph (1) for fiscal year 1996 and subse-
324
Subtitle F, Part 1
quent fiscal years, the Secretary shall reserve
such amounts as may be necessary to ensure
that, of the aggregate number of individuals
who are participants in the Scholarship Pro-
gram, the total number who are being educated
as nurses or are serving as nurses, respectively,
is increased to 20 percent.’’.
SEC. 15504. CREATION OF HOSPITAL-AFFILIATED PRIMARY
CARE CENTERS.
Section 330 of the Public Health Service Act (42
U.S.C. 254c) is amended by adding at the end the follow-
ing subsection:
‘‘(l) Of the amounts appropriated under subsection
(g)(1)(A) for a fiscal year, the Secretary shall reserve not
less than 10 percent, and not more than 20 percent, for
the establishment and operation of hospital-affiliated pri-
mary care centers, as defined in section 15504 of the Med-
icare Preservation Act of 1995.’’.
SEC. 15505. ESTABLISHMENT OF RURAL EMERGENCY AC-
CESS CARE HOSPITALS.
(a) ESTABLISHMENT.—
(1) IN
GENERAL.—Section 1861 (42 U.S.C.
1395x) is amended by adding at the end the follow-
ing new subsection:
325
Subtitle F, Part 1
‘‘Rural Emergency Access Care Hospital; Rural
Emergency Access Care Hospital Services
‘‘(oo)(1) The term ‘rural emergency access care hos-
pital’ means, for a fiscal year, a facility with respect to
which the Secretary finds the following:
‘‘(A) The facility is located in a rural area (as
defined in section 1886(d)(2)(D)).
‘‘(B) The facility was a hospital under this title
at any time during the 5-year period that ends on
the date of the enactment of this subsection.
‘‘(C) The facility is in danger of closing due to
low inpatient utilization rates and operating losses,
and the closure of the facility would limit the access
to emergency services of individuals residing in the
facility’s service area.
‘‘(D) The facility has entered into (or plans to
enter into) an agreement with a hospital with a par-
ticipation agreement in effect under section 1866(a),
and under such agreement the hospital shall accept
patients transferred to the hospital from the facility
and receive data from and transmit data to the
facility.
‘‘(E) There is a practitioner who is qualified to
provide advanced cardiac life support services (as de-
326
Subtitle F, Part 1
termined by the State in which the facility is lo-
cated) on-site at the facility on a 24-hour basis.
‘‘(F) A physician is available on-call to provide
emergency medical services on a 24-hour basis.
‘‘(G) The facility meets such staffing require-
ments as would apply under section 1861(e) to a
hospital located in a rural area, except that—
‘‘(i) the facility need not meet hospital
standards relating to the number of hours dur-
ing a day, or days during a week, in which the
facility must be open, except insofar as the fa-
cility is required to provide emergency care on
a 24-hour basis under subparagraphs (E) and
(F); and
‘‘(ii) the facility may provide any services
otherwise required to be provided by a full-time,
on-site dietitian, pharmacist, laboratory techni-
cian, medical technologist, or radiological tech-
nologist on a part-time, off-site basis.
‘‘(H) The facility meets the requirements appli-
cable to clinics and facilities under subparagraphs
(C) through (J) of paragraph (2) of section
1861(aa) and of clauses (ii) and (iv) of the second
sentence of such paragraph (or, in the case of the
requirements of subparagraph (E), (F), or (J) of
327
Subtitle F, Part 1
such paragraph, would meet the requirements if any
reference in such subparagraph to a ‘nurse practi-
tioner’ or to ‘nurse practitioners’ were deemed to be
a reference to a ‘nurse practitioner or nurse’ or to
‘nurse practitioners or nurses’); except that in deter-
mining whether a facility meets the requirements of
this subparagraph, subparagraphs (E) and (F) of
that paragraph shall be applied as if any reference
to a ‘physician’ is a reference to a physician as de-
fined in section 1861(r)(1).
‘‘(2) The term ‘rural emergency access care hospital
services’ means the following services provided by a rural
emergency access care hospital and furnished to an indi-
vidual over a continuous period not to exceed 24 hours
(except that such services may be furnished over a longer
period in the case of an individual who is unable to leave
the hospital because of inclement weather):
‘‘(A) An appropriate medical screening exam-
ination (as described in section 1867(a)).
‘‘(B) Necessary stabilizing examination and
treatment services for an emergency medical condi-
tion and labor (as described in section 1867(b)).’’.
(2) REQUIRING
RURAL
EMERGENCY
ACCESS
CARE HOSPITALS TO MEET HOSPITAL ANTI-DUMPING
REQUIREMENTS.—Section 1867(e)(5) (42 U.S.C.
328
Subtitle F, Part 1
1395dd(e)(5)) 
is 
amended 
by 
striking
‘‘1861(mm)(1))’’ and inserting ‘‘1861(mm)(1)) and
a rural emergency access care hospital (as defined in
section 1861(oo)(1))’’.
(b) COVERAGE AND PAYMENT UNDER PART B.—
(1) 
COVERAGE
UNDER
PART
B.—Section
1832(a)(2) (42 U.S.C. 1395k(a)(2)) is amended—
(A) by striking ‘‘and’’ at the end of sub-
paragraph (I);
(B) by striking the period at the end of
subparagraph (J) and inserting ‘‘; and’’; and
(C) by adding at the end the following new
subparagraph:
‘‘(K) rural emergency access care hospital
services (as defined in section 1861(oo)(2)).’’.
(2) PAYMENT BASED ON PAYMENT FOR OUT-
PATIENT
RURAL
PRIMARY
CARE
HOSPITAL
SERV-
ICES.—
(A) IN GENERAL.—Section 1833(a)(6) (42
U.S.C. 1395l(a)(6)) is amended by striking
‘‘services,’’ and inserting ‘‘services and rural
emergency access care hospital services,’’.
(B) 
PAYMENT
METHODOLOGY
DE-
SCRIBED.—Section 
1834(g) 
(42 
U.S.C.
1395m(g)) is amended—
329
Subtitle F, Part 1
(i) in the heading, by striking ‘‘SERV-
ICES’’ and inserting ‘‘SERVICES
AND
RURAL EMERGENCY ACCESS CARE HOS-
PITAL SERVICES’’; and
(ii) by adding at the end the following
new sentence: ‘‘The amount of payment for
rural emergency access care hospital serv-
ices provided during a year shall be deter-
mined using the applicable method pro-
vided under this subsection for determining
payment for outpatient rural primary care
hospital services during the year.’’.
(c) EFFECTIVE DATE.—The amendments made by
this section shall apply to fiscal years beginning on or
after October 1, 1995.
SEC. 15506. MEDICAL EDUCATION.
(a) STATE
AND
CONSORTIUM
DEMONSTRATION
PROJECTS.—
(1) IN GENERAL.—
(A) PARTICIPATION OF STATES AND CON-
SORTIA.—The Secretary shall establish and
conduct a demonstration project to increase the
number and percentage of medical students en-
tering primary care practice relative to those
entering nonprimary care practice under which
330
Subtitle F, Part 1
the Secretary shall make payments in accord-
ance with paragraph (4)—
(i) to not more than 10 States for the
purpose of testing and evaluating mecha-
nisms to meet the goals described in sub-
section (b); and
(ii) to not more than 10 health care
training consortia for the purpose of test-
ing and evaluating mechanisms to meet
such goals.
(B) EXCLUSION
OF
CONSORTIA
IN
PAR-
TICIPATING STATES.—A consortia may not re-
ceive payments under the demonstration project
under subparagraph (A)(ii) if any of its mem-
bers is located in a State receiving payments
under the project under subparagraph (A)(i).
(2) APPLICATIONS.—
(A) IN GENERAL.—Each State and consor-
tium desiring to conduct a demonstration
project under this subsection shall prepare and
submit to the Secretary an application, at such
time, in such manner, and containing such in-
formation as the Secretary may require to as-
sure that the State or consortium will meet the
goals described in subsection (b). In the case
331
Subtitle F, Part 1
of an application of a State, the application
shall include—
(i) information demonstrating that the
State has consulted with interested parties
with respect to the project, including State
medical associations, State hospital asso-
ciations, and medical schools located in the
State;
(ii) an assurance that no hospital con-
ducting an approved medical residency
training program in the State will lose
more than 10 percent of such hospital’s
approved medical residency positions in
any year as a result of the project; and
(iii) an explanation of a plan for eval-
uating the impact of the project in the
State.
(B) 
APPROVAL
OF
APPLICATIONS.—A
State or consortium that submits an application
under subparagraph (A) may begin a dem-
onstration project under this subsection—
(i) upon approval of such application
by the Secretary; or
(ii) at the end of the 60-day period
beginning on the date such application is
332
Subtitle F, Part 1
submitted, unless the Secretary denies the
application during such period.
(C) NOTICE AND COMMENT.—A State or
consortium shall issue a public notice on the
date it submits an application under subpara-
graph (A) which contains a general description
of the proposed demonstration project. Any in-
terested party may comment on the proposed
demonstration project to the State or consor-
tium or the Secretary during the 30-day period
beginning on the date the public notice is is-
sued.
(3) SPECIFIC
REQUIREMENTS
FOR
PARTICI-
PANTS.—
(A) REQUIREMENTS
FOR
STATES.—Each
State participating in the demonstration project
under this section shall use the payments pro-
vided under paragraph (4) to test and evaluate
either of the following mechanisms to increase
the number and percentage of medical students
entering primary care practice relative to those
entering nonprimary care practice:
(i) USE OF ALTERNATIVE WEIGHTING
FACTORS.—
333
Subtitle F, Part 1
(I) IN
GENERAL.—The State
may make payments to hospitals in
the State for direct graduate medical
education costs in amounts deter-
mined under the methodology pro-
vided under section 1886(h) of the
Social Security Act, except that the
State shall apply weighting factors
that are different than the weighting
factors otherwise set forth in section
1886(h)(4)(C) of the Social Security
Act.
(II) USE OF PAYMENTS FOR PRI-
MARY CARE RESIDENTS.—In applying
different 
weighting 
factors 
under
subclause (I), the State shall ensure
that the amount of payment made to
hospitals for costs attributable to pri-
mary care residents shall be greater
than the amount that would have been
paid to hospitals for costs attributable
to such residents if the State had ap-
plied the weighting factors otherwise
set forth in section 1886(h)(4)(C) of
the Social Security Act.
334
Subtitle F, Part 1
(ii) PAYMENTS
FOR
MEDICAL
EDU-
CATION
THROUGH
CONSORTIUM.—The
State may make payments for graduate
medical education costs through payments
to a health care training consortium (or
through any entity identified by such a
consortium as appropriate for receiving
payments on behalf of the consortium) that
is established in the State but that is not
otherwise participating in the demonstra-
tion project.
(B) REQUIREMENTS FOR CONSORTIUM.—
(i) IN
GENERAL.—In the case of a
consortium participating in the demonstra-
tion project under this section, the Sec-
retary shall make payments for graduate
medical education costs through a health
care training consortium whose members
provide medical residency training (or
through any entity identified by such a
consortium as appropriate for receiving
payments on behalf of the consortium).
(ii) USE OF PAYMENTS.—
(I) IN GENERAL.—Each consor-
tium receiving payments under clause
335
Subtitle F, Part 1
(i) shall use such funds to conduct ac-
tivities which test and evaluate mech-
anisms to increase the number and
percentage of medical students enter-
ing primary care practice relative to
those entering nonprimary care prac-
tice, and may use such funds for the
operation of the consortium.
(II) PAYMENTS TO PARTICIPAT-
ING
PROGRAMS.—The 
consortium
shall ensure that the majority of the
payments received under clause (i) are
directed to consortium members for
primary care residency programs, and
shall designate for each resident as-
signed to the consortium a hospital
operating an approved medical resi-
dency training program for purposes
of enabling the Secretary to calculate
the consortium’s payment amount
under the project. Such hospital shall
be the hospital where the resident re-
ceives the majority of the resident’s
hospital-based, nonambulatory train-
ing experience.
336
Subtitle F, Part 1
(4) ALLOCATION
OF
PORTION
OF
MEDICARE
GME PAYMENTS FOR ACTIVITIES UNDER PROJECT.—
Notwithstanding any provision of title XVIII of the
Social Security Act, the following rules apply with
respect to each State and each health care training
consortium 
participating 
in 
the 
demonstration
project established under this subsection during a
year:
(A) In the case of a State—
(i) the Secretary shall reduce the
amount of each payment made to hospitals
in the State during the year for direct
graduate medical education costs under
section 1886(h) of the Social Security Act
by 3 percent; and
(ii) the Secretary shall pay the State
an amount equal to the Secretary’s esti-
mate of the sum of the reductions made
during the year under clause (i) (as ad-
justed by the Secretary in subsequent
years for over- or under-estimations in the
amount estimated under this subparagraph
in previous years).
(B) In the case of a consortium—
337
Subtitle F, Part 1
(i) the Secretary shall reduce the
amount of each payment made to hospitals
who are members of the consortium during
the year for direct graduate medical edu-
cation costs under section 1886(h) of the
Social Security Act by 3 percent; and
(ii) the Secretary shall pay the consor-
tium an amount equal to the Secretary’s
estimate of the sum of the reductions made
during the year under clause (i) (as ad-
justed by the Secretary in subsequent
years for over- or under-estimations in the
amount estimated under this subparagraph
in previous years).
(5) ADDITIONAL
GRANT
FOR
PLANNING
AND
EVALUATION.—
(A) IN
GENERAL.—The Secretary may
award grants to States and consortia participat-
ing in the demonstration project under this sub-
section for the purpose of planning and evaluat-
ing such projects. A State or consortia may
conduct such planning and evaluation activities
or contract with a private entity to conduct
such activities. Each State and consortia desir-
ing to receive a grant under this subparagraph
338
Subtitle F, Part 1
shall prepare and submit to the Secretary an
application, at such time, in such manner, and
containing such information as the Secretary
may require.
(B) 
AUTHORIZATION
OF
APPROPRIA-
TIONS.—There are authorized to be appro-
priated for grants under this subparagraph
$250,000 for fiscal year 1996, and $100,000
for each of the fiscal years 1997 through 2001.
(6) DURATION.—A demonstration project under
this subsection shall be conducted for a period not
to exceed 5 years. The Secretary may terminate a
project if the Secretary determines that the State or
consortium conducting the project is not in substan-
tial compliance with the terms of the application ap-
proved by the Secretary.
(7) EVALUATIONS AND REPORTS.—
(A) EVALUATIONS.—Each State or consor-
tium participating in the demonstration project
shall submit to the Secretary a final evaluation
within 360 days of the termination of the State
or consortium’s participation and such interim
evaluations as the Secretary may require.
(B) REPORTS
TO
CONGRESS.—Not later
than 360 days after the first demonstration
339
Subtitle F, Part 1
project under this section begins, and annually
thereafter for each year in which such a project
is conducted, the Secretary shall submit a re-
port to Congress which evaluates the effective-
ness of the State and consortium activities con-
ducted under such projects and includes any
legislative recommendations determined appro-
priate by the Secretary.
(8) MAINTENANCE
OF
EFFORT.—Any funds
available for the activities covered by a demonstra-
tion project under this section shall supplement, and
shall not supplant, funds that are expended for simi-
lar purposes under any State, regional, or local pro-
gram.
(b) GOALS FOR PROJECTS.—The goals referred to in
this subsection for a State or consortium participating in
the demonstration project under this section are as fol-
lows:
(1) The training of an equal number of physi-
cian and nonphysician primary care providers.
(2) The recruiting of residents for graduate
medical education training programs who received a
portion of undergraduate training in a rural area.
(3) The allocation of not less than 50 percent
of the training spent in a graduate medical residency
340
Subtitle F, Part 1
training program at sites at which acute care inpa-
tient hospital services are not furnished.
(4) The rotation of residents in approved medi-
cal residency training programs among practices
that serve residents of rural areas.
(5) The development of a plan under which,
after a 5-year transition period, not less than 50
percent of the residents who begin an initial resi-
dency period in an approved medical residency train-
ing program shall be primary care residents.
(c) DEFINITIONS.—In this section:
(1) APPROVED MEDICAL RESIDENCY TRAINING
PROGRAM.—The term ‘‘approved medical residency
training program’’ has the meaning given such term
in section 1886(h)(5)(A) of the Social Security Act.
(2) HEALTH
CARE
TRAINING
CONSORTIUM.—
The term ‘‘health care training consortium’’ means
a State, regional, or local entity consisting of at
least one of each of the following:
(A) A hospital operating an approved med-
ical residency training program at which resi-
dents receive training at ambulatory training
sites located in rural areas.
(B) A school of medicine or osteopathic
medicine.
358
Subtitle H
(5) MEETINGS.—The Commission shall meet at
the call of its Chairman or a majority of its mem-
bers.
(6) COMPENSATION AND REIMBURSEMENT OF
EXPENSES.—Members of the Commission are not
entitled to receive compensation for service on the
Commission. Members may be reimbursed for travel,
subsistence, and other necessary expenses incurred
in carrying out the duties of the Commission.
(d) STAFF AND CONSULTANTS.—
(1) STAFF.—The Commission may appoint and
determine the compensation of such staff as may be
necessary to carry out the duties of the Commission.
Such appointments and compensation may be made
without regard to the provisions of title 5, United
States Code, that govern appointments in the com-
petitive services, and the provisions of chapter 51
and subchapter III of chapter 53 of such title that
relate to classifications and the General Schedule
pay rates.
(2) CONSULTANTS.—The Commission may pro-
cure such temporary and intermittent services of
consultants under section 3109(b) of title 5, United
States Code, as the Commission determines to be
necessary to carry out the duties of the Commission.