‘‘(1) The grant under such section will be ex-
pended exclusively for the following purposes (re-
garding the health of rural populations in the State):
‘‘(A) To develop integrated health net-
works.
‘‘(B) To develop systems for providing
emergency medical services.
‘‘(C) To develop telemedicine systems (as
defined in section 2741).
‘‘(D) To recruit and retain health care pro-
viders.
‘‘(E) To carry out any activity that was
authorized to be carried out with amounts pro-
vided to the States under any of the programs
that were repealed (or otherwise terminated) by
title II of the Rural Health Consolidated Grant
Act.
‘‘(F) To carry out activities that are au-
thorized by the State in collaboration with the
Director of the Office.
‘‘(2) In the case of the purposes selected under
paragraph (1) by the State, the State will give spe-
cial consideration to the following in expending the
grant:
‘‘(A) To carrying out the purposes through
one or more consortia, each of which consists of
three or more community organizations. Such
consortia may include for-profit entities, subject
to section 2706(a)(5).
‘‘(B) To utilizing entities that have admin-
istrative offices within the rural areas to be
served by the entity.
‘‘(C) To expending a substantial majority
of the grant within the rural areas that are to
be served or at the direction of one or more en-
tities located within those same areas.
‘‘(D) To utilizing entities and facilities
that were serving rural areas of the State as of
the date of submission of an application for a
grant by the State.
‘‘(E) To utilizing entities that will have the
financial capacity to continue serving rural
areas after assistance under the grant for the
entities is terminated.
‘‘(3) The State will in expending the grant give
special consideration to developing integrated health
networks for the provision of primary health care,
including preventive health services.
‘‘SEC. 2704. TECHNICAL ASSISTANCE; MATCHING FUNDS.
‘‘(a) REQUIREMENT OF TECHNICAL ASSISTANCE FOR
RURAL AREAS.—A funding agreement under section 2701
for a State for a fiscal year is that, in the case of the
entities to which the State provides amounts from the
grant to carry out activities for rural areas, the State will
make available to the entities technical assistance in carry-
ing out the activities.
‘‘(b) MATCHING FUNDS.—With respect to the costs
of the programs to be carried out by a State with a grant
under section 2701, a funding agreement under such sec-
tion for the State for a fiscal year is that the State will
make available (directly or through donations from public
or private entities) non-Federal contributions toward such
costs in an amount that is not less than $1 for each $4
of Federal funds provided in the grant.
‘‘SEC. 2705. EXERCISE OF STATE DISCRETION; GOALS AND
OBJECTIVES; ANNUAL REPORT.
‘‘(a) EXERCISE OF STATE DISCRETION; PARTICIPA-
TION OF STATE RESIDENTS.—With respect to the pur-
poses that a State has selected pursuant to section 2703
regarding the expenditure of a grant under section 2701
for a fiscal year, conditions for the receipt of the grant
are as follows:
‘‘(1) The application submitted under section
2707 specifies the purposes the State has selected.
‘‘(2) The application demonstrates that, in pre-
paring the application (including provisions included
pursuant to subsection (b)), the State consulted with
members of the public throughout rural areas in the
State, with a reasonable number and variety of
health care providers who provide services in such
areas, and with local governments in such areas.
‘‘(b) GOALS AND OBJECTIVES REGARDING HEALTH
OF RURAL POPULATIONS.—Conditions for the receipt of
a grant under section 2701 for a fiscal year are that the
application submitted by the State under section 2707
demonstrates that the State has complied with the follow-
ing:
‘‘(1) The State has identified the needs of rural
populations in the State regarding the purposes de-
scribed in section 2703(1), including an identifica-
tion of any deficiencies in the health status of such
populations.
‘‘(2) The State has determined goals and objec-
tives regarding such purposes; the means to be uti-
lized to meet such goals and objectives; and the
dates by which the State expects to meet the various
goals and objectives.
‘‘(3) The State has determined a methodology
for measuring the progress of the State toward
meeting the goals and objectives, and to the extent
practicable, the methodology conforms to any appli-
cable guidelines that the Director of the Office has
established for uniformity in the collection and re-
porting of data in order to provide for the com-
parability of the data.
‘‘(c) IMPLEMENTATION OF DECISIONS BY STATE.—
Funding agreements under section 2701 for a State for
a fiscal year are as follows:
‘‘(1) The grant under such section will be ex-
pended in accordance with the purposes that, pursu-
ant to subsection (a), are specified in the application
submitted under section 2707.
‘‘(2) If during the fiscal year the State elects to
make modifications in the application regarding such
purposes, the State will make the modifications in
accordance with subsection (a)(2) and will submit to
the Director of the Office a description of the modi-
fications (including a description of the effect of the
modifications on the provisions included in the appli-
cation pursuant to subsection (b)).
‘‘(d) ANNUAL REPORT.—A funding agreement under
section 2701 for a State for a fiscal year is that, after
the end of the fiscal year, the State will submit to the
Director of the Office (not later than the date specified
by the Director) a report describing, in terms of the mat-
ters specified in subsection (b), the activities carried out
under the grant.
‘‘SEC. 2706. LIMITATIONS ON EXPENDITURES OF GRANT.
‘‘(a) LIMITATIONS.—A funding agreement under sec-
tion 2701 for a State for a fiscal year is that the grant
under such section will not be expended—
‘‘(1) to provide inpatient health services;
‘‘(2) to conduct research projects;
‘‘(3) to purchase or improve land, or to pur-
chase, construct, or permanently improve (other
than minor remodeling) any building or other facil-
ity;
‘‘(4) to satisfy any requirement under other
Federal programs that non-Federal funds be pro-
vided as a condition of the receipt of Federal funds;
or
‘‘(5) to provide financial assistance to any en-
tity other than a public or nonprofit private entity.
‘‘(b) ADMINISTRATIVE EXPENSES.—A funding agree-
ment under section 2701 for a State for a fiscal year is
that not more than $75,000 of the grant under such sec-
tion will be expended for administrative expenses regard-
ing the grant.
‘‘SEC. 2707. APPLICATION FOR GRANT.
‘‘The Director of the Office may make a grant under
section 2701 only if an application for the grant is submit-
ted to the Director by the date specified by the Director;
the application meets the requirements established in this
subtitle for the application; and the application is in such
form, is made in such manner, and contains such agree-
ments, assurances, and information as may be necessary
for the Director to carry out this title.
‘‘SEC. 2708. AMOUNT OF ALLOTMENT.
‘‘(a) IN GENERAL.—For purposes of section 2701(a),
the allotment determined under this section for a State
for a fiscal year is an amount determined by the Director
of the Office through a formula established by the Direc-
tor on the basis of the following four factors:
‘‘(1) The number of individuals living in rural
areas in the State.
‘‘(2) The extent of poverty in rural areas in the
State.
‘‘(3) The extent to which primary health care is
available in rural areas in the State.
‘‘(4) The extent to which individuals living in
rural areas in the State are a significant distance
from sites at which health services are available.
‘‘(b) SUBMISSION TO CONGRESS OF FORMULA.—In
establishing a formula under subsection (a), the Director
of the Office shall submit to the Congress a report that
specifies the formula the Director intends to apply under
such subsection and that provides a description of the ef-
fect of the formula on the States. The formula may not
take effect any earlier than 60 days after the date on
which the report is submitted to the Congress.
‘‘(c) DISPOSITION OF CERTAIN FUNDS.—
‘‘(1) IN GENERAL.—Of the amounts available
for a fiscal year for grants under section 2701,
amounts described in paragraph (2), if any, shall be
allotted by the Director of the Office as grants to
States that submit applications in accordance with
section 2707 for the fiscal year. The amount of such
a grant for a State shall be determined in a manner
equivalent to the manner in which the amount of a
grant was otherwise determined under this section
for the State for the fiscal year, and the grant shall
be subject to the same conditions as grants under
section 2701.
‘‘(2) 
SPECIFICATION
OF
AMOUNTS.—The
amounts referred to in paragraph (1) for a fiscal
year are any amounts that are not paid under sec-
tion 2701 to the States for the fiscal year as a result
of—
‘‘(A) the failure of one or more States to
submit an application in accordance with sec-
tion 2707 for the fiscal year; or
‘‘(B) one or more States informing the Di-
rector of the Office that the State does not in-
tend to expend the full amount of the grant
made to the State under section 2701 for the
fiscal year.
‘‘Subtitle B—Administrator of
Program; Other Duties
‘‘SEC. 2731. ADMINISTRATOR.
‘‘(a) IN GENERAL.—There is established within the
Office of the Secretary an office to be known as the Office
of Rural Health Policy, which shall be headed by a Direc-
tor. The provisions of this section are subject to subsection
(c).
‘‘(b) DUTIES.—With respect to the health of rural
populations, the Director of the Office shall provide advice
to the Secretary regarding the effects of Federal policies;
coordinate activities within the Department of Health and
Human Services; provide information to the Secretary on
the activities of other Federal agencies; provide for the col-
lection and dissemination of information; provide for re-
search centers; provide for activities regarding the recruit-
ment and retention of health care providers; and provide
technical assistance. An advisory committee may be estab-
lished in order to advise the Secretary and the Director
of the Office regarding the health of residents of rural
areas and the provision and financing of health care serv-
ices in those same areas. The Director of the Office may
periodically submit to the Congress reports regarding the
health of such residents.
‘‘(c) RELATIONSHIP TO MEDICARE AND MEDICAID
PROGRAMS.—The duties established in this section for the
Director of the Office do not apply with respect to the
programs established in titles XVIII and XIX of the Social
Security Act.
‘‘Subtitle C—General Provisions
‘‘SEC. 2741. DEFINITIONS.
‘‘For purposes of this title:
‘‘(1) The term ‘funding agreement’, with re-
spect to a grant under section 2701 to a State,
means an agreement that is required as a condition
of receiving the grant. The Director of the Office
may make such a grant only if the State involved
makes each funding agreement described in subtitle
A.
‘‘(2) The term ‘Office’ means the Office of
Rural Health Policy, unless the context of usage in-
dicates otherwise.
‘‘(3) The term ‘rural area’ means areas that are
outside any standard metropolitan statistical area.
‘‘(4) The term ‘telemedicine system’ means a
system that uses telecommunications to transmit im-
ages for medical diagnosis and patient care between
two sites that are distant from each other. Such sys-
tems include patient counseling and clinical training
of residents and health professions students when
such training enables the provision of health care.
‘‘SEC. 2742. FUNDING.
‘‘(a) AUTHORIZATION OF APPROPRIATIONS.—For the
purpose of carrying out this title, there are authorized to
be appropriated $85,000,000 for fiscal year 1996, and
such sums as may be necessary for each of the fiscal years
1997 through 2000.
‘‘(b) LIMITATION REGARDING OFFICE
OF RURAL
HEALTH POLICY.—Of the amounts appropriated under
subsection (a) for a fiscal year, the Director of the Office
may reserve not more than $10,000,000 for carrying out
section 2731.’’.
Subtitle B—Provisions Relating to
Social Security Act
SEC. 111. CONFORMING AMENDMENT REGARDING RELA-
TIONSHIP TO MEDICARE AND MEDICAID PRO-
GRAMS.
Section 711 of the Social Security Act (42 U.S.C.
912) is amended to read as follows:
‘‘RURAL HEALTH POLICY
‘‘SEC. 711. (a) With respect to the programs estab-
lished under titles XVIII and XIX, the Director of the
Office of Rural Health Policy (in this section referred to
as the ‘Office’) shall provide advice to the Secretary re-
garding the effects that such programs have on the health
of rural populations. Such advice shall include advice on
the effects of current policies and proposed statutory, reg-
ulatory, administrative, and budgetary changes in such
programs on the financial viability of small rural hospitals,
the ability of rural areas (and rural hospitals in particular)
to attract and retain physicians and other health profes-
sionals, and access to (and the quality of) health care in
rural areas.
‘‘(b) The Director of the Office shall oversee compli-
ance with the requirements of section 1102(b) of this Act
and section 4403 of the Omnibus Budget Reconciliation
Act of 1987 (as such section pertains to rural health is-
sues).
‘‘(c) With respect to the effects that the programs
established under titles XVIII and XIX have on the health
of rural populations, the Director of the Office shall—
‘‘(1) provide for the collection and dissemina-
tion of information;
‘‘(2) coordinate activities within the Depart-
ment of Health and Human Services; and
‘‘(3) provide information to the Secretary and
others in such Department with respect to the activi-
ties of other Federal departments and agencies.
‘‘(d) For the purpose of carrying out this section,
there are authorized to be appropriated such sums as may
be necessary for each of the fiscal years 1996 through
2000.’’.
TITLE II—REPEAL OF CATEGOR-
ICAL PROGRAMS REGARDING
HEALTH 
OF 
RURAL 
POPU-
LATIONS
Subtitle A—Programs Relating to
Public Health Service Act
SEC. 201. PUBLIC HEALTH SERVICE ACT; REPEAL OF CAT-
EGORICAL PROGRAMS.
(a) STATUTORY PROVISIONS.—
(1) DEMONSTRATIONS
REGARDING
DELIVERY
SYSTEMS.—With respect to activities under section
902(b)(1) of the Public Health Service Act, the Ad-
ministrator for Health Care Policy and Research
shall, effective October 1, 1995, terminate all dem-
onstration projects that were in operation as of the
day before such date. On or after January 1, 1996,
such Administrator may establish additional dem-
onstration projects under such section, subject to the
extent of amounts made available in appropriations
Acts.
(2) TRAUMA CARE.—Effective October 1, 1995,
title XII of the Public Health Service Act (42 U.S.C.
300d et seq.) is amended by striking parts A
through C.
(3) SPECIAL
PROJECTS
REGARDING
HEALTH
PROFESSIONS
TRAINING.—Effective 
October 
1,
1995, section 778 of the Public Health Service Act
(42 U.S.C. 294p) is repealed.
(4) STATE OFFICES OF RURAL HEALTH.—Ef-
fective October 1, 1995, section 338J of the Public
Health Service Act (42 U.S.C. 254r) is repealed.
(b) ADMINISTRATIVE INITIATIVES.—
(1) OUTREACH GRANTS.—
(A) Effective October 1, 1995, the pro-
gram specified in subparagraph (B) is termi-
nated.
(B) The program referred to in subpara-
graph (A)—
(i) is referred to as the program for
rural outreach grants;
(ii) is carried out by the Adminis-
trator of the Health Resources and Serv-
ices Administration; and
(iii) is carried out for fiscal year 1995
with amounts that, under Public Law 103–
333, are made available for rural outreach
grants.
(2) TELECOMMUNICATIONS GRANTS.—
(A) Effective October 1, 1995, the pro-
gram specified in subparagraph (B) is termi-
nated.
(B) The program referred to in subpara-
graph (A)—
(i) is referred to as the telecommuni-
cations grant program;
(ii) is carried out by the Adminis-
trator of the Health Resources and Serv-
ices Administration; and
(iii) is carried out for fiscal year 1995
with amounts that, under Public Law 103–
333, are made available for rural health re-
search.
Subtitle B—Programs Relating to
Social Security Act
SEC. 211. SOCIAL SECURITY ACT AND RELATED PROVI-
SIONS; 
REPEAL 
OF 
CATEGORICAL 
PRO-
GRAMS.
(a) STATUTORY PROVISION; GRANT PROGRAM FOR
RURAL HEALTH CARE TRANSITION.—Effective October
1, 1995, section 4005 of the Omnibus Budget Reconcili-
ation Act of 1987 (101 Stat. 1330–47; Public Law 100–
203) is amended by striking subsection (e) (42 U.S.C.
1395ww note).
(b) ADMINISTRATIVE INITIATIVE; RURAL HEALTH
SYSTEM DELIVERY MODELS.—
(1) IN GENERAL.—Effective October 1, 1995,
the program specified in paragraph (2) is termi-
nated.
(2) SPECIFICATION
OF
PROGRAM.—The pro-
gram referred to in paragraph (1)—
(A) is referred to as the program to assist
States in developing innovative rural health sys-
tem delivery models;
(B) is carried out by the Administrator of
the Health Care Financing Administration; and
(C) is carried out for fiscal year 1995 with
amounts that, under Public Law 103–333, are
made available for new rural health grants.
Æ
HR 2175 IH——2