I
105TH CONGRESS
1ST SESSION
H. R. 1200
To provide for health care for every American and to control the cost and
enhance the quality of the health care system.
IN THE HOUSE OF REPRESENTATIVES
MARCH 20, 1997
Mr. MCDERMOTT (for himself, Mr. CONYERS, Ms. CHRISTIAN-GREEN, Mr.
DELLUMS, Mr. EVANS, Mr. FATTAH, Mr. FRANK of Massachusetts, Mr.
GONZALEZ, Mr. HINCHEY, Ms. JACKSON-LEE of Texas, Mr. LEWIS of
Georgia, Mr. MARTINEZ, Mr. NADLER, Mr. OLVER, Mr. PAYNE, Ms.
PELOSI, Mr. RUSH, Mr. SCOTT, Mr. SANDERS, Mr. SERRANO, Mr.
TOWNS, Mr. WATTS of Oklahoma, Mr. WAXMAN, Ms. WOOLSEY, and Mr.
YATES) introduced the following bill; which was referred to the Commit-
tee on Commerce, and in addition to the Committees on Ways and
Means, Government Reform and Oversight, and National Security, for a
period to be subsequently determined by the Speaker, in each case for
consideration of such provisions as fall within the jurisdiction of the com-
mittee concerned
A BILL
To provide for health care for every American and to control
the cost and enhance the quality of the health care system.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE; TABLE OF CONTENTS.
(a) SHORT TITLE.—This Act may be cited as the
‘‘American Health Security Act of 1997’’.
(b) TABLE OF CONTENTS.—The table of contents of
this Act is as follows:
Sec. 1. Short title; table of contents.
TITLE 
I—ESTABLISHMENT 
OF 
A 
STATE-BASED 
AMERICAN
HEALTH SECURITY PROGRAM; UNIVERSAL ENTITLEMENT; EN-
ROLLMENT
Sec. 101. Establishment of a State-based American Health Security Program.
Sec. 102. Universal entitlement.
Sec. 103. Enrollment.
Sec. 104. Portability of benefits.
Sec. 105. Effective date of benefits.
Sec. 106. Relationship to existing Federal health programs.
TITLE II—COMPREHENSIVE BENEFITS, INCLUDING PREVENTIVE
BENEFITS AND BENEFITS FOR LONG TERM CARE
Sec. 201. Comprehensive benefits.
Sec. 202. Definitions relating to services.
Sec. 203. Special rules for home and community-based long-term care services.
Sec. 204. Exclusions and limitations.
Sec. 205. Certification; quality review; plans of care.
TITLE III—PROVIDER PARTICIPATION
Sec. 301. Provider participation and standards.
Sec. 302. Qualifications for providers.
Sec. 303. Qualifications for comprehensive health service organizations.
Sec. 304. Limitation on certain physician referrals.
TITLE IV—ADMINISTRATION
Subtitle A—General Administrative Provisions
Sec. 401. American Health Security Standards Board.
Sec. 402. American Health Security Advisory Council.
Sec. 403. Consultation with private entities.
Sec. 404. State health security programs.
Sec. 405. Complementary conduct of related health programs.
Subtitle B—Control Over Fraud and Abuse
Sec. 411. Application of Federal sanctions to all fraud and abuse under Amer-
ican Health Security Program.
Sec. 412. Requirements for operation of State health care fraud and abuse con-
trol units.
TITLE V—QUALITY ASSESSMENT
Sec. 501. American Health Security Quality Council.
Sec. 502. Development of certain methodologies, guidelines, and standards.
Sec. 503. State quality review programs.
Sec. 504. Elimination of existing utilization review programs; transition.
TITLE VI—NATIONAL HEALTH SECURITY BUDGET; PAYMENTS;
COST CONTAINMENT MEASURES
Subtitle A—Budgeting and Payments to States
Sec. 601. National health security budget.
Sec. 602. Computation of individual and State capitation amounts.
Sec. 603. State health security budgets.
Sec. 604. Federal payments to States.
Sec. 605. Account for health professional education expenditures.
Subtitle B—Payments by States to Providers
Sec. 611. Payments to hospitals and other facility-based services for operating
expenses on the basis of approved global budgets.
Sec. 612. Payments to health care practitioners based on prospective fee
schedule.
Sec. 613. Payments to comprehensive health service organizations.
Sec. 614. Payments for community-based primary health services.
Sec. 615. Payments for prescription drugs.
Sec. 616. Approved devices and equipment.
Sec. 617. Payments for other items and services.
Sec. 618. Payment incentives for medically underserved areas.
Sec. 619. Authority for alternative payment methodologies.
Subtitle C—Mandatory Assignment and Administrative Provisions
Sec. 621. Mandatory assignment.
Sec. 622. Procedures for reimbursement; appeals.
TITLE VII—PROMOTION OF PRIMARY HEALTH CARE; DEVELOP-
MENT OF HEALTH SERVICE CAPACITY; PROGRAMS TO ASSIST
THE MEDICALLY UNDERSERVED
Subtitle A—Promotion and Expansion of Primary Care Professional Training
Sec. 701. Role of Board; establishment of primary care professional output
goals.
Sec. 702. Establishment of Advisory Committee on Health Professional Edu-
cation.
Sec. 703. Grants for health professions education, nurse education, and the Na-
tional Health Service Corps.
Subtitle B—Direct Health Care Delivery
Sec. 711. Setaside for public health block grants.
Sec. 712. Setaside for primary health care delivery.
Sec. 713. Primary care service expansion grants.
Subtitle C—Primary Care and Outcomes Research
Sec. 721. Set-aside for outcomes research.
Sec. 722. Office of Primary Care and Prevention Research.
Subtitle D—School-Related Health Services
Sec. 731. Authorizations of appropriations.
Sec. 732. Eligibility for development and operation grants.
Sec. 733. Preferences.
Sec. 734. Grants for development of projects.
Sec. 735. Grants for operation of projects.
Sec. 736. Federal administrative costs.
Sec. 737. Definitions.
TITLE VIII—FINANCING PROVISIONS; AMERICAN HEALTH
SECURITY TRUST FUND
Sec. 800. Amendment of 1986 code; section 15 not to apply.
Subtitle A—American Health Security Trust Fund
Sec. 801. American Health Security Trust Fund.
Subtitle B—Taxes Based on Income and Wages
Sec. 811. Payroll tax on employers.
Sec. 812. Health care income tax.
Subtitle C—Increase in Excise Taxes on Tobacco Products
Sec. 821. Increase in excise taxes on tobacco products.
TITLE IX—CONFORMING AMENDMENTS TO THE EMPLOYEE
RETIREMENT INCOME SECURITY ACT OF 1974
Sec. 901. ERISA inapplicable to health coverage arrangements under State
health security programs.
Sec. 902. Exemption of State health security programs from ERISA preemp-
tion.
Sec. 903. Prohibition of employee benefits duplicative of benefits under State
health security programs; coordination in case of workers’ com-
pensation.
Sec. 904. Repeal of continuation coverage requirements under ERISA and cer-
tain other requirements relating to group health plans.
Sec. 905. Effective date of title.
TITLE X—ADDITIONAL CONFORMING AMENDMENTS
Sec. 1001. Repeal of certain provisions in Internal Revenue Code of 1986.
Sec. 1002. Repeal of certain provisions in the Employee Retirement Income Se-
curity Act of 1974.
Sec. 1003. Repeal of certain provisions in the Public Health Service Act.
Sec. 1004. Effective date of title.
TITLE I—ESTABLISHMENT OF A
STATE-BASED 
AMERICAN
HEALTH 
SECURITY 
PRO-
GRAM; UNIVERSAL ENTITLE-
MENT; ENROLLMENT
SEC. 101. ESTABLISHMENT OF A STATE-BASED AMERICAN
HEALTH SECURITY PROGRAM.
(a) IN GENERAL.—There is hereby established in the
United States a State-Based American Health Security
Program to be administered by the individual States in
accordance with Federal standards specified in, or estab-
lished under, this Act.
(b) STATE HEALTH SECURITY PROGRAMS.—In order
for a State to be eligible to receive payment under section
604, a State must establish a State health security pro-
gram in accordance with this Act.
(c) STATE DEFINED.—
(1) IN GENERAL.—In this Act, subject to para-
graph (2), the term ‘‘State’’ means each of the fifty
States and the District of Columbia.
(2) ELECTION.—If the Governor of Puerto
Rico, the Virgin Islands, Guam, American Samoa, or
the Northern Mariana Islands certifies to the Presi-
dent that the legislature of the Commonwealth or
territory has enacted legislation desiring that the
Commonwealth or territory be included as a State
under the provisions of this Act, such Common-
wealth or territory shall be included as a ‘‘State’’
under this Act beginning January 1 of the first year
beginning ninety days after the President receives
the notification.
SEC. 102. UNIVERSAL ENTITLEMENT.
(a) IN GENERAL.—Every individual who is a resident
of the United States and is a citizen or national of the
United States or lawful resident alien (as defined in sub-
section (d)) is entitled to benefits for health care services
under this Act under the appropriate State health security
program. In this section, the term ‘‘appropriate State
health security program’’ means, with respect to an indi-
vidual, the State health security program for the State in
which the individual maintains a primary residence.
(b) TREATMENT OF CERTAIN NONIMMIGRANTS.—
(1) IN GENERAL.—The American Health Secu-
rity Standards Board (in this Act referred to as the
‘‘Board’’) may make eligible for benefits for health
care services under the appropriate State health se-
curity program under this Act such classes of aliens
admitted to the United States as nonimmigrants as
the Board may provide.
SEC. 104. PORTABILITY OF BENEFITS.
(a) IN GENERAL.—To ensure continuous access to
benefits for health care services covered under this Act,
each State health security program—
(1) shall not impose any minimum period of
residence in the State, or waiting period, in excess
of three months before residents of the State are
entitled to, or eligible for, such benefits under the
program;
(2) shall provide continuation of payment for
covered health care services to individuals who have
terminated their residence in the State and estab-
lished their residence in another State, for the dura-
tion of any waiting period imposed in the State of
new residency for establishing entitlement to, or
eligibility for, such services; and
(3) shall provide for the payment for health
care services covered under this Act provided to indi-
viduals while temporarily absent from the State
based on the following principles:
(A) Payment for such health care services
is at the rate that is approved by the State
health security program in the State in which
the services are provided, unless the States con-
cerned agree to apportion the cost between
them in a different manner.
(B) Payment for such health care services
provided outside the United States is made on
the basis of the amount that would have been
paid by the State health security program for
similar services rendered in the State, with due
regard, in the case of hospital services, to the
size of the hospital, standards of service, and
other relevant factors.
(b) 
CROSS-BORDER
ARRANGEMENTS.—A 
State
health security program for a State may negotiate with
such a program in an adjacent State a reciprocal arrange-
ment for the coverage under such other program of health
care services to enrollees residing in the border region.
SEC. 105. EFFECTIVE DATE OF BENEFITS.
Benefits shall first be available under this Act for
items and services furnished on or after January 1, 1999.
SEC. 106. RELATIONSHIP TO EXISTING FEDERAL HEALTH
PROGRAMS.
(a) MEDICARE AND MEDICAID.—
(1) IN GENERAL.—Notwithstanding any other
provision of law, subject to paragraph (2)—
(A) no benefits shall be available under
title XVIII of the Social Security Act for any
item or service furnished after December 31,
1998,
(B) no individual is entitled to medical as-
sistance under a State plan approved under
title XIX of such Act for any item or service
furnished after such date, and
(C) no payment shall be made to a State
under section 1903(a) of such Act with respect
to medical assistance for any item or service
furnished after such date.
(2) TRANSITION.—In the case of inpatient hos-
pital services and extended care services during a
continuous period of stay which began before Janu-
ary 1, 1999, and which had not ended as of such
date, for which benefits are provided under title
XVIII, or under a State plan under title XIX, of the
Social Security Act, the Secretary of Health and
Human Services and each State plan, respectively,
shall provide for continuation of benefits under such
title or plan until the end of the period of stay.
(b) FEDERAL EMPLOYEES HEALTH BENEFITS PRO-
GRAM.—No benefits shall be made available under chapter
89 of title 5, United States Code, for any part of a cov-
erage period occurring after December 31, 1998.
(c) CHAMPUS.—No benefits shall be made available
under sections 1079 and 1086 of title 10, United States
Code, for items or services furnished after December 31,
1998.
(d) TREATMENT OF BENEFITS FOR VETERANS AND
NATIVE AMERICANS.—Nothing in this Act shall affect the
eligibility of veterans for the medical benefits and services
provided under title 38, United States Code, or of Indians
for the medical benefits and services provided by or
through the Indian Health Service.
TITLE II—COMPREHENSIVE BEN-
EFITS, INCLUDING PREVEN-
TIVE BENEFITS AND BENE-
FITS FOR LONG-TERM CARE
SEC. 201. COMPREHENSIVE BENEFITS.
(a) IN GENERAL.—Subject to the succeeding provi-
sions of this title, individuals enrolled for benefits under
this Act are entitled to have payment made under a State
health security program for the following items and serv-
ices if medically necessary or appropriate for the mainte-
nance of health or for the diagnosis, treatment, or rehabili-
tation of a health condition:
(1) HOSPITAL SERVICES.—Inpatient and out-
patient hospital care, including 24-hour-a-day emer-
gency services.
(2) 
PROFESSIONAL
SERVICES.—Professional
services of health care practitioners authorized to
provide health care services under State law, includ-
ing patient education and training in self-manage-
ment techniques.
(3) 
COMMUNITY-BASED
PRIMARY
HEALTH
SERVICES.—Community-based primary health serv-
ices (as defined in section 202(a)).
(4) PREVENTIVE
SERVICES.—Preventive serv-
ices (as defined in section 202(b)).
(5) LONG-TERM, ACUTE, AND CHRONIC CARE
SERVICES.—
(A) Nursing facility services.
(B) Home health services.
(C) Home and community-based long-term
care services (as defined in section 202(c)) for
individuals described in section 203(a).
(D) Hospice care.
(E) Services in intermediate care facilities
for individuals with mental retardation.
(6) PRESCRIPTION DRUGS, BIOLOGICALS, INSU-
LIN, MEDICAL FOODS.—
(A) Outpatient prescription drugs and
biologicals, as specified by the Board consistent
with section 515.
(B) Insulin.
(C) Medical foods (as defined in section
202(e)).
(7) DENTAL SERVICES.—Dental services (as de-
fined in section 202(h)).
(8) MENTAL HEALTH AND SUBSTANCE ABUSE
TREATMENT
SERVICES.—Mental health and sub-
stance abuse treatment services (as defined in sec-
tion 202(f)).
(9) DIAGNOSTIC TESTS.—Diagnostic tests.
(10) OTHER ITEMS AND SERVICES.—
(A) OUTPATIENT
THERAPY.—Outpatient
physical therapy services, outpatient speech pa-
thology services, and outpatient occupational
therapy services in all settings.
(B) DURABLE MEDICAL EQUIPMENT.—Du-
rable medical equipment.
(C) HOME DIALYSIS.—Home dialysis sup-
plies and equipment.
(D) AMBULANCE.—Emergency ambulance
service.
(E) PROSTHETIC DEVICES.—Prosthetic de-
vices, including replacements of such devices.
(F) ADDITIONAL ITEMS AND SERVICES.—
Such other medical or health care items or
services as the Board may specify.
(b) COST-SHARING.—
(1) IN GENERAL.—Except as provided in this
subsection, there are no deductibles, coinsurance, or
copayments applicable to acute care and preventive
benefits provided under this title.
(2) COST-SHARING
FOR
LONG-TERM
CARE
SERVICES.—
(A) IN GENERAL.—
(i) payments for home and commu-
nity-based long-term care services are sub-
ject to coinsurance of 20 percent, and
(ii) payments for nursing facility serv-
ices are subject to coinsurance of 35 per-
cent.
(B) EXCEPTION.—With respect to the co-
insurance 
established 
under 
subparagraph
(A)—
(i) such coinsurance shall not apply to
an individual with income (as defined by
the Secretary) of not more than 100 per-
cent of the income official poverty line ap-
plicable to a family of the size involved;
and
(ii) in the case of an individual with
such income that exceeds 100 percent, but
is less than 200 percent, of such applicable
poverty line, the coinsurance shall be re-
duced in the same proportion as the pro-
portion of such income is less than 200
percent of such applicable poverty line.
(c) PROHIBITION OF BALANCE BILLING.—As pro-
vided in section 531, no person may impose a charge for
covered services for which benefits are provided under this
Act.
(d) NO DUPLICATE HEALTH INSURANCE.—Each
State health security program shall prohibit the sale of
health insurance in the State if payment under the insur-
ance duplicates payment for any items or services for
which payment may be made under such a program.
(e) STATE PROGRAM MAY PROVIDE ADDITIONAL
BENEFITS.—Nothing in this Act shall be construed as
limiting the benefits that may be made available under a
State health security program to residents of the State
at the expense of the State.
(f) EMPLOYERS MAY PROVIDE ADDITIONAL BENE-
FITS.—Nothing in this Act shall be construed as limiting
the additional benefits that an employer may provide to
employees or their dependents, or to former employees or
their dependents.
SEC. 202. DEFINITIONS RELATING TO SERVICES.
(a) COMMUNITY-BASED PRIMARY HEALTH SERV-
ICES.—In this title, the term ‘‘community-based primary
health services’’ means ambulatory health services fur-
nished—
(1) by a rural health clinic;
(2) by a Federally qualified health center (as
defined in section 1905(l)(2)(B) of the Social Secu-
rity Act), and which, for purposes of this Act, in-
clude services furnished by State and local health
agencies;
(3) in a school-based setting;
(4) by public educational agencies and other
providers of services to children entitled to assist-
ance under the Individuals with Disabilities Edu-
cation Act for services furnished pursuant to a
written Individualized Family Services Plan or
Individual Education Plan under such Act; and
(5) public and private nonprofit entities receiv-
ing Federal assistance under the Public Health
Service Act.
(b) PREVENTIVE SERVICES.—
(1) IN GENERAL.—In this title, the term ‘‘pre-
ventive services’’ means items and services—
(A) which—
(i) are specified in paragraph (2), or
(ii) the Board determines to be effec-
tive in the maintenance and promotion of
health or minimizing the effect of illness,
disease, or medical condition; and
(B) which are provided consistent with the
periodicity schedule established under para-
graph (3).
(2) SPECIFIED
PREVENTIVE
SERVICES.—The
services specified in this paragraph are as follows:
(A) Basic immunizations.
(B) Prenatal and well-baby care (for in-
fants under one year of age).
(C) Well-child care (including periodic
physical examinations, hearing and vision
screening, and developmental screening and ex-
aminations) for individuals under 18 years of
age.
(D) Periodic screening mammography, Pap
smears, and colorectal examinations and exami-
nations for prostate cancer.
(E) Physical examinations.
(F) Family planning services.
(G) Routine eye examinations, eyeglasses,
and contact lenses.
(H) Hearing aids, but only upon a deter-
mination of a certified audiologist or physician
that a hearing problem exists and is caused by
a condition that can be corrected by use of a
hearing aid.
(3) SCHEDULE.—The Board shall establish, in
consultation with experts in preventive medicine and
public health and taking into consideration those
preventive services recommended by the Preventive
Services Task Force and published as the Guide to
Clinical Preventive Services, a periodicity schedule
for the coverage of preventive services under para-
graph (1). Such schedule shall take into consider-
ation the cost-effectiveness of appropriate preventive
care and shall be revised not less frequently than
once every 5 years, in consultation with experts in
preventive medicine and public health.
(c) HOME
AND
COMMUNITY-BASED
LONG-TERM
CARE SERVICES.—In this title, the term ‘‘home and com-
munity-based long-term care services’’ means the following
services provided to an individual to enable the individual
to remain in such individual’s place of residence within
the community:
(1) Home health aide services.
(2) Adult day health care, social day care or
psychiatric day care.
(3) Medical social work services.
(4) Care coordination services, as defined in
subsection (g)(1).
(5) Respite care, including training for informal
caregivers.
(6) Personal assistance services, and home-
maker services (including meals) incidental to the
provision of personal assistance services.
(d) HOME HEALTH SERVICES.—
(1) IN
GENERAL.—The term ‘‘home health
services’’ means items and services described in sec-
tion 1861(m) of the Social Security Act and includes
home infusion services.
(2) HOME
INFUSION
SERVICES.—The term
‘‘home infusion services’’ includes the nursing, phar-
macy, and related services that are necessary to con-
duct the home infusion of a drug regimen safely and
effectively under a plan established and periodically
reviewed by a physician and that are provided in
compliance with quality assurance requirements es-
tablished by the Secretary.
(e) MEDICAL FOODS.—In this title, the term ‘‘medi-
cal foods’’ means foods which are formulated to be
consumed or administered enterally under the supervision
of a physician and which are intended for the specific die-
tary management of a disease or condition for which
distinctive nutritional requirements, based on recognized
scientific principles, are established by medical evaluation.
(f) MENTAL
HEALTH
AND
SUBSTANCE
ABUSE
TREATMENT SERVICES.—
(1) SERVICES
DESCRIBED.—In this title, the
term ‘‘mental health and substance abuse treatment
services’’ means the following services related to the
prevention, diagnosis, treatment, and rehabilitation
of mental illness and promotion of mental health:
(A) INPATIENT HOSPITAL SERVICES.—In-
patient hospital services furnished primarily for
the diagnosis or treatment of mental illness or
substance abuse for up to 60 days during a
year, reduced by a number of days determined
by the Secretary so that the actuarial value of
providing such number of days of services
under this paragraph to the individual is equal
to the actuarial value of the days of inpatient
residential services furnished to the individual
under subparagraph (B) during the year after
such services have been furnished to the indi-
vidual for 120 days during the year (rounded to
the nearest day), but only if (with respect to
services furnished to an individual described in
section 204(b)(1)) such services are furnished
in conformity with the plan of an organized sys-
tem of care for mental health and substance
abuse services in accordance with section
204(b)(2).
(B) INTENSIVE RESIDENTIAL SERVICES.—
Intensive residential services (as defined in
paragraph (2)) furnished to an individual for
up to 120 days during any calendar year, ex-
cept that—
(i) such services may be furnished to
the individual for additional days during
the year if necessary for the individual to
complete a course of treatment to the ex-
tent that the number of days of inpatient
hospital services described in subparagraph
(A) that may be furnished to the individual
during the year (as reduced under such
subparagraph) is not less than 15; and
(ii) reduced by a number of days de-
termined by the Secretary so that the actu-
arial value of providing such number of
days of services under this paragraph to
the individual is equal to the actuarial
value of the days of intensive community-
based services furnished to the individual
under subparagraph (D) during the year
after such services have been furnished to
the individual for 90 days (or, in the case
of services described in subparagraph
(D)(ii), for 180 days) during the year
(rounded to the nearest day).
(C) OUTPATIENT
SERVICES.—Outpatient
treatment services of mental illness or sub-
stance abuse (other than intensive community-
based services under subparagraph (D)) for an
unlimited number of days during any calendar
year furnished in accordance with standards es-
tablished by the Secretary for the management
of such services, and, in the case of services fur-
nished to an individual described in section
204(b)(1) who is not an inpatient of a hospital,
in conformity with the plan of an organized sys-
tem of care for mental health and substance
abuse services in accordance with section
204(b)(2).
(D) INTENSIVE COMMUNITY-BASED SERV-
ICES.—Intensive community-based services (as
described in paragraph (3))—
(i) for an unlimited number of days
during any calendar year, in the case of
services described in section 1861(ff)(2)(E)
that are furnished to an individual who is
a seriously mentally ill adult, a seriously
emotionally disturbed child, or an adult or
child with serious substance abuse disorder
(as determined in accordance with criteria
established by the Secretary);
(ii) in the case of services described in
section 1861(ff)(2)(C), for up to 180 days
during any calendar year, except that such
services may be furnished to the individual
for a number of additional days during the
year equal to the difference between the
total number of days of intensive residen-
tial services which the individual may re-
ceive during the year under part A (as de-
termined under subparagraph (B)) and the
number of days of such services which the
individual has received during the year, or
(iii) in the case of any other such
services, for up to 90 days during any cal-
endar year, except that such services may
be furnished to the individual for the num-
ber of additional days during the year de-
scribed in clause (ii).
(2) INTENSIVE
RESIDENTIAL
SERVICES
DE-
FINED.—
(A) IN
GENERAL.—Subject to subpara-
graphs (B) and (C), the term ‘‘intensive resi-
dential services’’ means inpatient services pro-
vided in any of the following facilities:
(i) Residential detoxification centers.
(ii) Crisis residential programs or
mental illness residential treatment pro-
grams.
(iii) Therapeutic family or group
treatment homes.
(iv) Residential centers for substance
abuse treatment.
(B) REQUIREMENTS FOR FACILITIES.—No
service may be treated as an intensive residen-
tial service under subparagraph (A) unless the
facility at which the service is provided—
(i) is legally authorized to provide
such service under the law of the State (or
under a State regulatory mechanism pro-
vided by State law) in which the facility is
located or is certified to provide such serv-
ice by an appropriate accreditation entity
approved by the State in consultation with
the Secretary; and
(ii) meets such other requirements as
the Secretary may impose to assure the
quality of the intensive residential services
provided.
(C) SERVICES
FURNISHED
TO
AT-RISK
CHILDREN.—In the case of services furnished
to an individual described in section 204(b)(1),
no service may be treated as an intensive resi-
dential service under this subsection unless the
service is furnished in conformity with the plan
of an organized system of care for mental
health and substance abuse services in accord-
ance with section 204(b)(2).
(D) MANAGEMENT STANDARDS.—No serv-
ice may be treated as an intensive residential
service under subparagraph (A) unless the serv-
ice is furnished in accordance with standards
established by the Secretary for the manage-
ment of such services.
(3) INTENSIVE
COMMUNITY-BASED
SERVICES
DEFINED.—
(A) IN
GENERAL.—The term ‘‘intensive
community-based services’’ means the items
and services described in subparagraph (B) pre-
scribed by a physician (or, in the case of serv-
ices furnished to an individual described in sec-
tion 204(b)(1), by an organized system of care
for mental health and substance abuse services
in accordance with such section) and provided
under a program described in subparagraph
(D) under the supervision of a physician (or, to
the extent permitted under the law of the State
in which the services are furnished, a non-phy-
sician mental health professional) pursuant to
an individualized, written plan of treatment es-
tablished and periodically reviewed by a physi-
cian (in consultation with appropriate staff par-
ticipating in such program) which sets forth the
physician’s diagnosis, the type, amount, fre-
quency, and duration of the items and services
provided under the plan, and the goals for
treatment under the plan, but does not include
any item or service that is not furnished in ac-
cordance with standards established by the Sec-
retary for the management of such services.
(B) ITEMS AND SERVICES DESCRIBED.—
The items and services described in this sub-
paragraph are—
(i) partial hospitalization services con-
sisting of the items and services described
in subparagraph (C);
(ii) psychiatric rehabilitation services;
(iii) day treatment services for indi-
viduals under 19 years of age;
(iv) in-home services;
(v) case management services, includ-
ing collateral services designated as such
case management services by the Sec-
retary;
(vi) ambulatory detoxification services;
(vii) such other items and services as
the Secretary may provide (but in no event
to include meals and transportation),
that are reasonable and necessary for the diag-
nosis or active treatment of the individual’s
condition, reasonably expected to improve or
maintain the individual’s condition and func-
tional level and to prevent relapse or hos-
pitalization, and furnished pursuant to such
guidelines relating to frequency and duration of
services as the Secretary shall by regulation es-
tablish (taking into account accepted norms of
medical practice and the reasonable expectation
of patient improvement).
(C) ITEMS
AND
SERVICES
INCLUDED
AS
PARTIAL
HOSPITALIZATION
SERVICES.—For
purposes of subparagraph (B)(i), partial hos-
pitalization services consist of the following:
(i) Individual and group therapy with
physicians or psychologists (or other men-
tal health professionals to the extent au-
thorized under State law).
(ii) Occupational therapy requiring
the skills of a qualified occupational thera-
pist.
(iii) Services of social workers, trained
psychiatric nurses, behavioral aides, and
other staff trained to work with psychiatric
patients (to the extent authorized under
State law).
(iv) Drugs and biologicals furnished
for therapeutic purposes (which cannot, as
determined in accordance with regulations,
be self-administered).
(v) Individualized activity therapies
that are not primarily recreational or di-
versionary.
(vi) Family counseling (the primary
purpose of which is treatment of the indi-
vidual’s condition).
(vii) Patient training and education
(to the extent that training and edu-
cational activities are closely and clearly
related to the individual’s care and treat-
ment).
(viii) Diagnostic services.
(D) PROGRAMS
DESCRIBED.—A program
described in this subparagraph is a program
(whether facility-based or freestanding) which is
furnished by an entity—
(i) legally authorized to furnish such a
program under State law (or the State reg-
ulatory mechanism provided by State law)
or certified to furnish such a program by
an appropriate accreditation entity ap-
proved by the State in consultation with
the Secretary; and
(ii) meeting such other requirements
as the Secretary may impose to assure the
quality of the intensive community-based
services provided.
(g) CARE COORDINATION SERVICES.—
(1) IN GENERAL.—In this title, the term ‘‘care
coordination services’’ means services provided by
care coordinators (as defined in paragraph (2)) to
individuals described in paragraph (3) for the co-
ordination and monitoring of home and community-
based long term care services to ensure appropriate,
cost-effective utilization of such services in a com-
prehensive and continuous manner, and includes—
(A) transition management between inpa-
tient facilities and community-based services,
including assisting patients in identifying and
gaining access to appropriate ancillary services;
and
(B) evaluating and recommending appro-
priate treatment services, in cooperation with
patients and other providers and in conjunction
with any quality review program or plan of care
under section 205.
(2) CARE COORDINATOR.—
(A) IN GENERAL.—In this title, the term
‘‘care coordinator’’ means an individual or non-
profit or public agency or organization which
the State health security program determines—
(i) is capable of performing directly,
efficiently, and effectively the duties of a
care coordinator described in paragraph
(1), and
(ii) demonstrates capability in estab-
lishing and periodically reviewing and re-
vising plans of care, and in arranging for
and monitoring the provision and quality
of services under any plan.
(B) INDEPENDENCE.—State health secu-
rity programs shall establish safeguards to as-
sure that care coordinators have no financial in-
terest in treatment decisions or placements.
Care coordination may not be provided through
any structure or mechanism through which
quality review is performed.
(3) ELIGIBLE INDIVIDUALS.—An individual de-
scribed in this paragraph is an individual described
in section 203 (relating to individuals qualifying for
long term and chronic care services).
(h) DENTAL SERVICES.—
(1) IN GENERAL.—In this title, subject to sub-
section (b), the term ‘‘dental services’’ means the
following:
(A) Emergency dental treatment, including
extractions, for bleeding, pain, acute infections,
and injuries to the maxillofacial region.
(B) Prevention and diagnosis of dental dis-
ease, including examinations of the hard and
soft tissues of the oral cavity and related struc-
tures, radiographs, dental sealants, fluorides,
and dental prophylaxis.
(C) Treatment of dental disease, including
non-cast fillings, periodontal maintenance serv-
ices, and endodontic services.
(D) Space maintenance procedures to pre-
vent orthodontic complications.
(E) Orthodontic treatment to prevent se-
vere malocclusions.
(F) Full dentures.
(G) Medically necessary oral health care.
(H) Any items and services for special
needs patients that are not described in sub-
paragraphs (A) through (G) and that—
(i) are required to provide such pa-
tients the items and services described in
subparagraphs (A) through (G);
(ii) are required to establish oral func-
tion (including general anesthesia for indi-
viduals with physical or emotional limita-
tions that prevent the provision of dental
care without such anesthesia);
(iii) consist of orthodontic care for se-
vere dentofacial abnormalities; or
(iv) consist of prosthetic dental de-
vices for genetic or birth defects or fitting
for such devices.
(I) Any dental care for individuals with a
seizure disorder that is not described in sub-
paragraphs (A) through (H) and that is re-
quired because of an illness, injury, disorder, or
other health condition that results from such
seizure disorder.
(2) LIMITATIONS.—Dental services are subject
to the following limitations:
(A) PREVENTION AND DIAGNOSIS.—
(i) 
EXAMINATIONS
AND
PROPHY-
LAXIS.—The examinations and prophylaxis
described in paragraph (1)(B) are covered
only consistent with a periodicity schedule
established by the Board, which schedule
may provide for special treatment of indi-
viduals less than 18 years of age and of
special needs patients.
(ii) DENTAL SEALANTS.—The dental
sealants described in such paragraph are
not covered for individuals 18 years of age
or older. Such sealants are covered for in-
dividuals less than 10 years of age for pro-
tection of the 1st permanent molars. Such
sealants are covered for individuals 10
years of age or older for protection of the
2d permanent molars.
(B) TREATMENT OF DENTAL DISEASE.—
Prior to January 1, 2004, the items and serv-
ices described in paragraph (1)(C) are covered
only for individuals less than 18 years of age
and special needs patients. On or after such
date, such items and services are covered for all
individuals enrolled for benefits under this Act,
except that endodontic services are not covered
for individuals 18 years of age or older.
(C) SPACE MAINTENANCE.—The items and
services described in paragraph (1)(D) are cov-
ered only for individuals at least 3 years of age,
but less than 13 years of age and—
(i) are limited to posterior teeth;
(ii) involve maintenance of a space or
spaces for permanent posterior teeth that
would otherwise be prevented from normal
eruption if the space were not maintained;
and
(iii) do not include a space maintainer
that is placed within 6 months of the ex-
pected eruption of the permanent posterior
tooth concerned.
(D) ORTHODONTIC TREATMENT.—Prior to
January 1, 2004, the items and services de-
scribed in paragraph (1)(E) are covered only
for individuals at least 6 years of age, but less
than 12 years of age, who have severe
dentofacial abnormalities. On or after such
date, such items and services are covered only
for individuals at least 6 years of age, but less
than 12 years of age.
(E) DENTURES.—Prior to January 1,
2004, the dentures described in paragraph
(1)(F) are not covered, except for special needs
patients. On or after such date, dentures are
covered for an individual consistent with a peri-
odicity schedule established by the Board, ex-
cept that the limitation of periodicity provided
in such schedule shall not apply to a special
needs patient.
(3) DEFINITIONS.—For purposes of this title:
(A) MEDICALLY NECESSARY ORAL HEALTH
CARE.—The term ‘‘medically necessary oral
health care’’ means oral health care that is re-
quired as a direct result of, or would have a di-
rect impact on, an underlying medical condi-
tion. Such term includes oral health care di-
rected toward control or elimination of pain, in-
fection, or reestablishment of oral function.
(B) SPECIAL NEEDS PATIENT.—The term
‘‘special needs patient’’ includes an individual
with a genetic or birth defect, a developmental
disability, or an acquired medical disability.
(i) NURSING FACILITY; NURSING FACILITY SERV-
ICES.—Except as may be provided by the Board, the
terms ‘‘nursing facility’’ and ‘‘nursing facility services’’
have the meanings given such terms in sections 1919(a)
and 1905(f), respectively, of the Social Security Act.
(j) SERVICES IN INTERMEDIATE CARE FACILITIES
FOR INDIVIDUALS WITH MENTAL RETARDATION.—Ex-
cept as may be provided by the Board—
(1) the term ‘‘intermediate care facility for indi-
viduals with mental retardation’’ has the meaning
specified in section 1905(d) of the Social Security
Act (as in effect before the enactment of this Act);
and
(2) the term ‘‘services in intermediate care fa-
cilities for individuals with mental retardation’’
means services described in section 1905(a)(15) of
such Act (as so in effect) in an intermediate care fa-
cility for individuals with mental retardation to an
individual determined to require such services in ac-
cordance with standards specified by the Board and
comparable to the standards described in section
1902(a)(31)(A) of such Act (as so in effect).
(k) OTHER TERMS.—Except as may be provided by
the Board, the definitions contained in section 1861 of the
Social Security Act shall apply.
SEC. 203. SPECIAL RULES FOR HOME AND COMMUNITY-
BASED LONG-TERM CARE SERVICES.
(a) QUALIFYING INDIVIDUALS.—For purposes of sec-
tion 201(a)(5)(C), individuals described in this subsection
are the following individuals:
(1) ADULTS.—Individuals 18 years of age or
older determined (in a manner specified by the
Board)—
(A) to be unable to perform, without the
assistance of an individual, at least 2 of the fol-
lowing 5 activities of daily living (or who has a
similar level of disability due to cognitive
impairment)—
(i) bathing;
(ii) eating;
(iii) dressing;
(iv) toileting; and
(v) transferring in and out of a bed or
in and out of a chair;
(B) due to cognitive or mental impair-
ments, to require supervision because the indi-
vidual behaves in a manner that poses health or
safety hazards to himself or herself or others;
or
(C) due to cognitive or mental impair-
ments, to require queuing to perform activities
of daily living.
(2) CHILDREN.—Individuals under 18 years of
age determined (in a manner specified by the Board)
to meet such alternative standard of disability for
children as the Board develops. Such alternative
standard shall be comparable to the standard for
adults and appropriate for children.
(b) LIMIT ON SERVICES.—
(1) IN GENERAL.—The aggregate expenditures
by a State health security program with respect to
home and community-based long-term care services
in a period (specified by the Board) may not exceed
65 percent (or such alternative ratio as the Board
establishes under paragraph (2)) of the average of
the amount of payment that would have been made
under the program during the period if all the home-
based long-term care beneficiaries had been resi-
dents of nursing facilities in the same area in which
the services were provided.
(2) ALTERNATIVE RATIO.—The Board may es-
tablish for purposes of paragraph (1) an alternative
ratio (of payments for home and community-based
long term care services to payments for nursing fa-
cility services) as the Board determines to be more
consistent with the goal of providing cost-effective
long-term care in the most appropriate and least
restrictive setting.
SEC. 204. EXCLUSIONS AND LIMITATIONS.
(a) IN GENERAL.—Subject to section 201(e), benefits
for service are not available under this Act unless the
services meet the standards specified in section 201(a).
(b) SPECIAL DELIVERY REQUIREMENTS FOR MEN-
TAL HEALTH AND SUBSTANCE ABUSE TREATMENT SERV-
ICES PROVIDED TO AT-RISK CHILDREN.—
(1) REQUIRING
SERVICES
TO
BE
PROVIDED
THROUGH ORGANIZED SYSTEMS OF CARE.—A State
health security program shall ensure that mental
health services and substance abuse treatment serv-
ices are furnished through an organized system of
care, as described in paragraph (2), if—
(A) the services are provided to an individ-
ual less than 22 years of age;
(B) the individual has a serious emotional
disturbance or a substance abuse disorder; and
(C) the individual is, or is at imminent risk
of being, subject to the authority of, or in need
of the services of, at least 1 public agency that
serves the needs of children, including an agen-
cy involved with child welfare, special education,
juvenile justice, or criminal justice.
(2) REQUIREMENTS FOR SYSTEM OF CARE.—In
this subsection, an ‘‘organized system of care’’ is a
community-based service delivery network, which
may consist of public and private providers, that
meets the following requirements:
(A) The system has established linkages
with existing mental health services and sub-
stance abuse treatment service delivery pro-
grams in the plan service area (or is in the
process of developing or operating a system
with appropriate public agencies in the area to
coordinate the delivery of such services to indi-
viduals in the area).
(B) The system provides for the participa-
tion and coordination of multiple agencies and
providers that serve the needs of children in the
area, including agencies and providers involved
with child welfare, education, juvenile justice,
criminal justice, health care, mental health, and
substance abuse prevention and treatment.
(C) The system provides for the involve-
ment of the families of children to whom mental
health services and substance abuse treatment
services are provided in the planning of treat-
ment and the delivery of services.
(D) The system provides for the develop-
ment and implementation of individualized
treatment plans by multidisciplinary and multi-
agency teams, which are recognized and fol-
lowed by the applicable agencies and providers
in the area.
(E) The system ensures the delivery and
coordination of the range of mental health serv-
ices and substance abuse treatment services re-
quired by individuals under 22 years of age who
have a serious emotion disturbance or a sub-
stance abuse disorder.
(F) The system provides for the manage-
ment of the individualized treatment plans de-
scribed in subparagraph (D) and for a flexible
response to changes in treatment needs over
time.
(c) TREATMENT OF EXPERIMENTAL SERVICES.—In
applying subsection (a), the Board shall make national
coverage determinations with respect to those services that
are experimental in nature. Such determinations shall be
made consistent with a process that provides for input
from representatives of health care professionals and pa-
tients and public comment.
(d) APPLICATION
OF PRACTICE GUIDELINES.—In
the case of services for which the American Health Secu-
rity Quality Council (established under section 501) has
recognized a national practice guideline, the services are
considered to meet the standards specified in section
201(a) if they have been provided in accordance with such
guideline or in accordance with such guidelines as are pro-
vided by the State health security program consistent with
title V. For purposes of this subsection, a service shall
be considered to have been provided in accordance with
a practice guideline if the health care provider providing
the service exercised appropriate professional discretion to
deviate from the guideline in a manner authorized or an-
ticipated by the guideline.
(e) SPECIFIC LIMITATIONS.—
(1) LIMITATIONS
ON
EYEGLASSES, CONTACT
LENSES, HEARING
AIDS, AND
DURABLE
MEDICAL
EQUIPMENT.—Subject to section 201(e), the Board
may impose such limits relating to the costs and fre-
quency of replacement of eyeglasses, contact lenses,
hearing aids, and durable medical equipment to
which individuals enrolled for benefits under this Act
are entitled to have payment made under a State
health security program as the Board deems appro-
priate.
(2) OVERLAP WITH PREVENTIVE SERVICES.—
The coverage of services described in section 201(a)
(other than paragraph (3)) which also are preventive
services are required to be covered only to the extent
that they are required to be covered as preventive
services.
(3) MISCELLANEOUS EXCLUSIONS FROM COV-
ERED SERVICES.—Covered services under this Act
do not include the following:
(A) Surgery and other procedures (such as
orthodontia) performed solely for cosmetic pur-
poses (as defined in regulations) and hospital or
other services incident thereto, unless—
(i) required to correct a congenital
anomaly;
(ii) required to restore or correct a
part of the body which has been altered as
a result of accidental injury, disease, or
surgery; or
(iii) otherwise determined to be medi-
cally necessary and appropriate under sec-
tion 201(a).
(B) Personal comfort items or private
rooms in inpatient facilities, unless determined
to be medically necessary and appropriate
under section 201(a).
(C) The services of a professional practi-
tioner if they are furnished in a hospital or
dealing with problems associated with the consump-
tion of such services.
(f) DUTIES.—
(1) IN GENERAL.—It shall be the duty of the
Council—
(A) to advise the Board on matters of gen-
eral policy in the administration of this Act, in
the formulation of regulations, and in the per-
formance of the Board’s duties under section
401; and
(B) to study the operation of this Act and
the utilization of health services under it, with
a view to recommending any changes in the ad-
ministration of the Act or in its provisions
which may appear desirable.
(2) REPORT.—The Council shall make an an-
nual report to the Board on the performance of its
functions, including any recommendations it may
have with respect thereto, and the Board shall
promptly transmit the report to the Congress, to-
gether with a report by the Board on any rec-
ommendations of the Council that have not been
followed.
(g) STAFF.—The Council, its members, and any com-
mittees of the Council shall be provided with such sec-