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and appropriate supporting documentation (which
had been previously specified) within 30 days after
the date the service was provided. Such a program
may require that bills for services for which payment
may be made under this section, or for any class of
such services, be submitted electronically.
(b) PAYMENT RATES BASED ON NEGOTIATED PRO-
SPECTIVE FEE SCHEDULES.—With respect to any pay-
ment method for a class of services of practitioners, the
State health security program shall establish, on a pro-
spective basis, a payment schedule. The State health secu-
rity program may establish such a schedule after negotia-
tions with organizations representing the practitioners in-
volved. Such fee schedules shall be designed to provide in-
centives for practitioners to choose primary care medicine,
including general internal medicine and pediatrics, over
medical specialization. Nothing in this section shall be con-
strued as preventing a State from adjusting the payment
schedule amounts on a quarterly or other periodic basis
depending on whether expenditures under the schedule will
exceed the budgeted amount with respect to such expendi-
tures.
(c) BILLABLE COVERED SERVICE DEFINED.—In this
section, the term ‘‘billable covered service’’ means a service
covered under section 201 for which a practitioner is enti-
125
tled to compensation by payment of a fee determined
under this section.
SEC. 613. PAYMENTS TO COMPREHENSIVE HEALTH SERV-
ICE ORGANIZATIONS.
(a) IN GENERAL.—Payment under a State health se-
curity program to a comprehensive health service organi-
zation to its enrollees shall be determined by the State—
(1) based on a global budget described in sec-
tion 611, or
(2) based on the basic capitation amount de-
scribed in subsection (b) for each of its enrollees.
(b) BASIC CAPITATION AMOUNT.—
(1) IN GENERAL.—The basic capitation amount
described in this subsection for an enrollee shall be
determined by the State health security program on
the basis of the average amount of expenditures that
is estimated would be made under the State health
security program for covered health care services for
an enrollee, based on actuarial characteristics (as de-
fined by the State health security program).
(2) 
ADJUSTMENT
FOR
SPECIAL
HEALTH
NEEDS.—The State health security program shall
adjust such average amounts to take into account
the special health needs, including a disproportionate
126
number of medically underserved individuals, of pop-
ulations served by the organization.
(3) ADJUSTMENT
FOR
SERVICES
NOT
PRO-
VIDED.—The State health security program shall ad-
just such average amounts to take into account the
cost of covered health care services that are not pro-
vided by the comprehensive health service organiza-
tion under section 303(a).
SEC. 614. PAYMENTS FOR COMMUNITY-BASED PRIMARY
HEALTH SERVICES.
(a) IN GENERAL.—In the case of community-based
primary health services, subject to subsection (b), pay-
ments under a State health security program shall—
(1) be based on a global budget described in
section 611,
(2) be based on the basic primary care capita-
tion amount described in subsection (c) for each in-
dividual enrolled with the provider of such services,
or
(3) be made on a fee-for-service basis under
section 612.
(b) PAYMENT ADJUSTMENT.—Payments under sub-
section (a) may include, consistent with the budgets devel-
oped under this title—
127
(1) an additional amount, as set by the State
health security program, to cover the costs incurred
by a provider which serves persons not covered by
this Act whose health care is essential to overall
community health and the control of communicable
disease, and for whom the cost of such care is other-
wise uncompensated,
(2) an additional amount, as set by the State
health security program, to cover the reasonable
costs incurred by a provider that furnishes case
management 
services 
(as 
defined 
in 
section
1915(g)(2) of the Social Security Act), transpor-
tation services, and translation services, and
(3) an additional amount, as set by the State
health security program, to cover the costs incurred
by a provider in conducting health professional edu-
cation programs in connection with the provision of
such services.
(c) BASIC PRIMARY CARE CAPITATION AMOUNT.—
(1) IN GENERAL.—The basic primary care capi-
tation amount described in this subsection for an en-
rollee with a provider of community-based primary
health services shall be determined by the State
health security program on the basis of the average
amount of expenditures that is estimated would be
128
made under the State health security program for
such an enrollee, based on actuarial characteristics
(as defined by the State health security program).
(2) 
ADJUSTMENT
FOR
SPECIAL
HEALTH
NEEDS.—The State health security program shall
adjust such average amounts to take into account
the special health needs, including a disproportionate
number of medically underserved individuals, of pop-
ulations served by the provider.
(3) ADJUSTMENT
FOR
SERVICES
NOT
PRO-
VIDED.—The State health security program shall ad-
just such average amounts to take into account the
cost of community-based primary health services
that are not provided by the provider.
(d) COMMUNITY-BASED PRIMARY HEALTH SERVICES
DEFINED.—In this section, the term ‘‘community-based
primary health services’’ has the meaning given such term
in section 202(a).
SEC. 615. PAYMENTS FOR PRESCRIPTION DRUGS.
(a) ESTABLISHMENT OF LIST.—
(1) IN GENERAL.—The Board shall establish a
list of approved prescription drugs and biologicals
that the Board determines are necessary for the
maintenance or restoration of health or of employ-
129
ability or self-management and eligible for coverage
under this Act.
(2) EXCLUSIONS.—The Board may exclude re-
imbursement under this Act for ineffective, unsafe,
or over-priced products where better alternatives are
determined to be available.
(b) PRICES.—For each such listed prescription drug
or biological covered under this Act, for insulin, and for
medical foods, the Board shall from time to time deter-
mine a product price or prices which shall constitute the
maximum to be recognized under this Act as the cost of
a drug to a provider thereof. The Board may conduct ne-
gotiations, on behalf of State health security programs,
with product manufacturers and distributors in determin-
ing the applicable product price or prices.
(c) CHARGES
BY INDEPENDENT PHARMACIES.—
Each State health security program shall provide for pay-
ment for a prescription drug or biological or insulin fur-
nished by an independent pharmacy based on the drug’s
cost to the pharmacy (not in excess of the applicable prod-
uct price established under subsection (b)) plus a dispens-
ing fee. In accordance with standards established by the
Board, each State health security program, after consulta-
tion with representatives of the pharmaceutical profession,
shall establish schedules of dispensing fees, designed to af-
130
ford reasonable compensation to independent pharmacies
after taking into account variations in their cost of oper-
ation resulting from regional differences, differences in the
volume of prescription drugs dispensed, differences in
services provided, the need to maintain expenditures with-
in the budgets established under this title, and other
relevant factors.
SEC. 616. PAYMENTS FOR APPROVED DEVICES AND EQUIP-
MENT.
(a) ESTABLISHMENT OF LIST.—The Board shall es-
tablish a list of approved durable medical equipment and
therapeutic devices and equipment (including eyeglasses,
hearing aids, and prosthetic appliances), that the Board
determines are necessary for the maintenance or restora-
tion of health or of employability or self-management and
eligible for coverage under this Act.
(b) CONSIDERATIONS AND CONDITIONS.—In estab-
lishing the list under subsection (a), the Board shall take
into consideration the efficacy, safety, and cost of each
item contained on such list, and shall attach to any item
such conditions as the Board determines appropriate with
respect to the circumstances under which, or the frequency
with which, the item may be prescribed.
(c) PRICES.—For each such listed item covered under
this Act, the Board shall from time to time determine a
131
product price or prices which shall constitute the maxi-
mum to be recognized under this Act as the cost of the
item to a provider thereof. The Board may conduct nego-
tiations, on behalf of State health security programs, with
equipment and device manufacturers and distributors in
determining the applicable product price or prices.
(d) EXCLUSIONS.—The Board may exclude from cov-
erage under this Act ineffective, unsafe, or overpriced
products where better alternatives are determined to be
available.
SEC. 617. PAYMENTS FOR OTHER ITEMS AND SERVICES.
In the case of payment for other covered health serv-
ices, the amount of payment under a State health security
program shall be established by the program—
(1) in accordance with payment methodologies
which are specified by the Board, after consultation
with the American Health Security Advisory Coun-
cil, or methodologies established by the State under
section 620, and
(2) consistent with the State health security
budget.
SEC. 618. PAYMENT INCENTIVES FOR MEDICALLY UNDER-
SERVED AREAS.
(a) MODEL PAYMENT METHODOLOGIES.—In addi-
tion to the payment amounts otherwise provided in this
132
title, the Board shall establish model payment methodolo-
gies and other incentives that promote the provision of
covered health care services in medically underserved
areas, particularly in rural and inner-city underserved
areas.
(b) CONSTRUCTION.—Nothing in this title shall be
construed as limiting the authority of State health security
programs to increase payment amounts or otherwise pro-
vide additional incentives, consistent with the State health
security budget, to encourage the provision of medically
necessary and appropriate services in underserved areas.
SEC. 619. AUTHORITY FOR ALTERNATIVE PAYMENT METH-
ODOLOGIES.
A State health security program, as part of its plan
under section 404(a), may use a payment methodology
other than a methodology required under this subtitle so
long as—
(1) such payment methodology does not affect
the entitlement of individuals to coverage, the
weighting of fee schedules to encourage an increase
in the number of primary care providers, the ability
of individuals to choose among qualified providers,
the benefits covered under the program, or the com-
pliance of the program with the State health security
budget under subtitle A, and
133
(2) the program submits periodic reports to the
Board showing the operation and effectiveness of the
alternative methodology, in order for the Board to
evaluate the appropriateness of applying the alter-
native methodology to other States.
Subtitle C—Mandatory Assignment
and Administrative Provisions
SEC. 631. MANDATORY ASSIGNMENT.
(a) NO BALANCE BILLING.—Payments for benefits
under this Act shall constitute payment in full for such
benefits and the entity furnishing an item or service for
which payment is made under this Act shall accept such
payment as payment in full for the item or service and
may not accept any payment or impose any charge for
any such item or service other than accepting payment
from the State health security program in accordance with
this Act.
(b) ENFORCEMENT.—If an entity knowingly and will-
fully bills for an item or service or accepts payment in
violation of subsection (a), the Board may apply sanctions
against the entity in the same manner as sanctions could
have been imposed under section 1842(j)(2) of the Social
Security Act for a violation of section 1842(j)(1) of such
Act. Such sanctions are in addition to any sanctions that
134
a State may impose under its State health security
program.
SEC. 632. PROCEDURES FOR REIMBURSEMENT; APPEALS.
(a) PROCEDURES FOR REIMBURSEMENT.—In accord-
ance with standards issued by the Board, a State health
security program shall establish a timely and administra-
tively simple procedure to assure payment within 60 days
of the date of submission of clean claims by providers
under this Act.
(b) APPEALS PROCESS.—Each State health security
program shall establish an appeals process to handle all
grievances pertaining to payment to providers under this
title.
TITLE VII—PROMOTION OF PRI-
MARY HEALTH CARE; DEVEL-
OPMENT OF HEALTH SERV-
ICE CAPACITY; PROGRAMS TO
ASSIST THE MEDICALLY UN-
DERSERVED
Subtitle A—Promotion and Expan-
sion of Primary Care Profes-
sional Training
SEC. 701. ROLE OF BOARD; ESTABLISHMENT OF PRIMARY
CARE PROFESSIONAL OUTPUT GOALS.
(a) IN GENERAL.—The Board is responsible for—
135
(1) coordinating health professional education
policies and goals, in consultation with the Secretary
of Health and Human Services (in this title referred
to as the ‘‘Secretary’’), to achieve the national goals
specified in subsection (b);
(2) overseeing the health professional education
expenditures of the State health security programs
from the account established under section 602(c);
(3) developing and maintaining, in cooperation
with the Secretary, a system to monitor the number
and specialties of individuals through their health
professional education, any postgraduate training,
and professional practice; and
(4) developing, coordinating, and promoting
other policies that expand the number of primary
care practitioners.
(b) NATIONAL GOALS.—The national goals specified
in this subsection are as follows:
(1) GRADUATE MEDICAL EDUCATION.—By not
later than 5 years after the date of the enactment
of this Act, at least 50 percent of the residents in
medical residency education programs (as defined in
subsection (e)(1)) are primary care residents (as
defined in subsection (e)(3)).