I
106TH CONGRESS
1ST SESSION
H. R. 2341
To amend title XIX of the Social Security Act to establish a new prospective
payment system for Federally-qualified health centers and rural health clinics.
IN THE HOUSE OF REPRESENTATIVES
JUNE 24, 1999
Mr. BURR of North Carolina (for himself and Mr. TOWNS) introduced the
following bill; which was referred to the Committee on Commerce
A BILL
To amend title XIX of the Social Security Act to establish
a new prospective payment system for Federally-qualified
health centers and rural health clinics.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ‘‘Safety Net Preserva-
tion Act of 1999’’.
SEC. 2. NEW PROSPECTIVE PAYMENT SYSTEM FOR FEDER-
ALLY-QUALIFIED 
HEALTH 
CENTERS 
AND
RURAL HEALTH CLINICS.
(a) IN GENERAL.—Section 1902(a) of the Social Se-
curity Act (42 U.S.C. 1396a(a)) is amended—
(1) in paragraph (13)—
(A) in subparagraph (A), by adding ‘‘and’’
at the end;
(B) in subparagraph (B), by striking
‘‘and’’ at the end; and
(C) by striking subparagraph (C); and
(2) by inserting after paragraph (14) the fol-
lowing new paragraph:
‘‘(15) for payment for services described in
clause (B) or (C) of section 1905(a)(2) under the
plan in accordance with subsection (aa);’’.
(b) NEW PROSPECTIVE PAYMENT SYSTEM.—Section
1902 of the Social Security Act (42 U.S.C. 1396a) is
amended by adding at the end the following:
‘‘(aa) PAYMENT FOR SERVICES PROVIDED BY FED-
ERALLY-QUALIFIED
HEALTH
CENTERS
AND
RURAL
HEALTH CLINICS.—
‘‘(1) IN GENERAL.—Beginning with fiscal year
2000 and each succeeding fiscal year, the State plan
shall provide for payment for services described in
section 1905(a)(2)(C) furnished by a Federally-
qualified health center and services described in sec-
tion 1905(a)(2)(B) furnished by a rural health clinic
in accordance with the provisions of this subsection.
‘‘(2) FISCAL YEAR 2000.—Subject to paragraph
(4), for services furnished during fiscal year 2000,
the State plan shall provide for payment for such
services in an amount (calculated on a per visit
basis) that is equal to 100 percent of the costs of
the center or clinic of furnishing such services dur-
ing fiscal year 1999 which are reasonable and re-
lated to the cost of furnishing such services, or
based on such other tests of reasonableness as the
Secretary prescribes in regulations under section
1833(a)(3), or, in the case of services to which such
regulations do not apply, the same methodology used
under section 1833(a)(3), adjusted to take into ac-
count any increase in the scope of such services fur-
nished by the center or clinic during fiscal year
2000.
‘‘(3) FISCAL YEAR 2001 AND SUCCEEDING FIS-
CAL YEARS.—Subject to paragraph (4), for services
furnished during fiscal year 2001 or a succeeding
fiscal year, the State plan shall provide for payment
for such services in an amount (calculated on a per
visit basis) that is equal to the amount calculated for
such services under this subsection for the preceding
fiscal year—
‘‘(A) increased by the percentage increase
in the MEI (as defined in section 1842(i)(3))
applicable to primary care services (as defined
in section 1842(i)(4)) for that fiscal year; and
‘‘(B) adjusted to take into account any in-
crease in the scope of such services furnished by
the center or clinic during that fiscal year.
‘‘(4) ESTABLISHMENT OF INITIAL YEAR PAY-
MENT AMOUNT FOR NEW CENTERS OR CLINICS.—In
any case in which an entity first qualifies as a Fed-
erally-qualified health center or rural health clinic
after fiscal year 1999, the State plan shall provide
for payment for services described in section
1905(a)(2)(C) furnished by the center or services
described in section 1905(a)(2)(B) furnished by the
clinic in the first fiscal year in which the center or
clinic so qualifies in an amount (calculated on a per
visit basis) that is equal to 100 percent of the costs
of furnishing such services during such fiscal year in
accordance with the regulations and methodology re-
ferred to in paragraph (2). For each fiscal year fol-
lowing the fiscal year in which the entity first quali-
fies as a Federally-qualified health center or rural
health clinic, the State plan shall provide for the
payment amount to be calculated in accordance with
paragraph (3).
‘‘(5) ADMINISTRATION IN THE CASE OF MAN-
AGED CARE.—In the case of services furnished by a
Federally-qualified health center or rural health clin-
ic pursuant to a contract between the center or clinic
and a managed care entity (as defined in section
1932(a)(1)(B)), the State plan shall provide for pay-
ment to the center or clinic (at least quarterly) by
the State of a supplemental payment equal to the
amount (if any) by which the amount determined
under paragraphs (2), (3), and (4) of this subsection
exceeds the amount of the payments provided under
the contract.
‘‘(6) ALTERNATIVE
PAYMENT
METHODOLO-
GIES.—Notwithstanding any other provision of this
section, the State plan may provide for payment in
any fiscal year to a Federally-qualified health center
for services described in section 1905(a)(2)(C) or to
a rural health clinic for services described in section
1905(a)(2)(B) in an amount which is determined
under an alternative payment methodology that—
‘‘(A) is agreed to by the State and the cen-
ter or clinic; and
‘‘(B) results in payment to the center or
clinic of an amount which is at least equal to
the amount otherwise required to be paid to the
center or clinic under this section.’’.
(c) CONFORMING AMENDMENTS.—
(1) Section 4712 of the Balanced Budget Act
of 1997 (Public Law 105-33; 111 Stat. 508) is
amended by striking subsection (c).
(2) Section 1915(b) of the Social Security Act
(42 U.S.C. 1396n(b)) is amended by striking
‘‘1902(a)(13)(E)’’ 
and 
inserting 
‘‘1902(a)(15),
1902(aa),’’.
(d) EFFECTIVE DATE.—The amendments made by
this section take effect on October 1, 1999, and apply to
services furnished on or after such date.
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