enactment of this Act, the Board shall annually
report to Congress on the following:
(A) The status of implementation of the
Act.
(B) Enrollment under this Act.
(C) Benefits under this Act.
(D) Expenditures and financing under this
Act.
(E) 
Cost-containment 
measures 
and
achievements under this Act.
(F) Quality assurance.
(G) Health care utilization patterns, in-
cluding any changes attributable to the pro-
gram.
(H) Long-range plans and goals for the de-
livery of health services.
(I) Differences in the health status of the
populations of the different States, including in-
come and racial characteristics.
(J) Necessary changes in the education of
health personnel.
(K) Plans for improving service to medi-
cally underserved populations.
(L) Transition problems as a result of im-
plementation of this Act.
(M) Opportunities for improvements under
this Act.
(3) STATISTICAL ANALYSES AND OTHER STUD-
IES.—The Board may, either directly or by con-
tract—
(A) make statistical and other studies, on
a nationwide, regional, state, or local basis, of
any aspect of the operation of this Act, includ-
ing studies of the effect of the Act upon the
health of the people of the United States and
the effect of comprehensive health services upon
the health of persons receiving such services;
(B) develop and test methods of providing
through payment for services or otherwise, ad-
ditional incentives for adherence by providers to
standards of adequacy, access, and quality;
methods of consumer and peer review and peer
control of the utilization of drugs, of laboratory
services, and of other services; and methods of
consumer and peer review of the quality of serv-
ices;
(C) develop and test, for use by the Board,
records and information retrieval systems and
budget systems for health services administra-
tion, and develop and test model systems for
use by providers of services;
(D) develop and test, for use by providers
of services, records and information retrieval
systems useful in the furnishing of preventive
or diagnostic services;
(E) develop, in collaboration with the phar-
maceutical profession, and test, improved ad-
ministrative practices or improved methods for
the reimbursement of independent pharmacies
for the cost of furnishing drugs as a covered
service; and
(F) make such other studies as it may con-
sider necessary or promising for the evaluation,
or for the improvement, of the operation of this
Act.
(4) REPORT
ON
USE
OF
EXISTING
FEDERAL
HEALTH CARE FACILITIES.—Not later than one year
after the date of the enactment of this Act, the
Board shall recommend to the Congress one or more
proposals for the treatment of health care facilities
of the Federal Government.
(h) EXECUTIVE DIRECTOR.—
(1) APPOINTMENT.—There is hereby estab-
lished the position of Executive Director of the
Board. The Director shall be appointed by the
Board and shall serve as secretary to the Board and
perform such duties in the administration of this
title as the Board may assign.
(2) DELEGATION.—The Board is authorized to
delegate to the Director or to any other officer or
employee of the Board or, with the approval of the
Secretary of Health and Human Services (and sub-
ject to reimbursement of identifiable costs), to any
other officer or employee of the Department of
Health and Human Services, any of its functions or
duties under this Act other than—
(A) the issuance of regulations; or
(B) the determination of the availability of
funds and their allocation to implement this
Act.
(3) COMPENSATION.—The Executive Director
of the Board shall be entitled to compensation at a
level equivalent to level III of the Executive Sched-
ule, in accordance with section 5314 of title 5,
United States Code.
(i) INSPECTOR GENERAL.—The Inspector General
Act of 1978 (5 U.S.C. App.) is amended—
(1) in section 11(1) by inserting after ‘‘Cor-
poration;’’ the following: ‘‘the Chair of the American
Health Security Standards Board;’’;
(2) in section 11(2) by inserting after ‘‘Infor-
mation Agency,’’ the following: ‘‘the American
Health Security Standards Board,’’; and
(3) by inserting after section 8F the following:
‘‘§ 8G. 
Special 
provisions 
concerning 
American
Health Security Standards Board
‘‘The Inspector General of the American Health Se-
curity Standards Board, in addition to the other authori-
ties vested by this Act, shall have the same authority, with
respect to the Board and the American Health Security
Program under this Act, as the Inspector General for the
Department of Health and Human Services has with re-
spect to the Secretary of Health and Human Services and
the medicare and medicaid programs, respectively.’’.
(j) STAFF.—The Board shall employ such staff as the
Board may deem necessary.
(k) ACCESS
TO INFORMATION.—The Secretary of
Health and Human Services shall make available to the
Board all information available from sources within the
Department or from other sources, pertaining to the
duties of the Board.
SEC. 402. AMERICAN HEALTH SECURITY ADVISORY COUN-
CIL.
(a) IN GENERAL.—The Board shall provide for an
American Health Security Advisory Council (in this sec-
tion referred to as the ‘‘Council’’) to advise the Board on
its activities.
(b) MEMBERSHIP.—The Council shall be composed
of—
(1) the Chair of the Board, who shall serve as
Chair of the Council, and
(2) twenty members, not otherwise in the em-
ploy of the United States, appointed by the Board
without regard to the provisions of title 5, United
States Code, governing appointments in the competi-
tive service.
The appointed members shall include, in accordance with
subsection (e), individuals who are representative of State
health security programs, public health professionals, pro-
viders of health services, and of individuals (who shall con-
stitute a majority of the Council) who are representative
of consumers of such services, including a balanced rep-
resentation of employers, unions, consumer organizations,
and population groups with special health care needs.
(c) TERMS OF MEMBERS.—Each appointed member
shall hold office for a term of four years, except that—
(1) any member appointed to fill a vacancy oc-
curring during the term for which the member’s
predecessor was appointed shall be appointed for the
remainder of that term; and
(2) the terms of the members first taking office
shall expire, as designated by the Board at the time
of appointment, five at the end of the first year, five
at the end of the second year, five at the end of the
third year, and five at the end of the fourth year
after the date of enactment of this Act.
(d) VACANCIES.—
(1) IN GENERAL.—The Board shall fill any va-
cancy in the membership of the Council in the same
manner as the original appointment. The vacancy
shall not affect the power of the remaining members
to execute the duties of the Council.
(2) VACANCY
APPOINTMENTS.—Any member
appointed to fill a vacancy shall serve for the re-
mainder of the term for which the predecessor of the
member was appointed.
(3) REAPPOINTMENT.—The Board may re-
appoint an appointed member of the Council for a
second term in the same manner as the original
appointment.
(e) QUALIFICATIONS.—
(1) PUBLIC
HEALTH
REPRESENTATIVES.—
Members of the Council who are representative of
State health security programs and public health
professionals shall be individuals who have extensive
experience in the financing and delivery of care
under public health programs.
(2) PROVIDERS.—Members of the Council who
are representative of providers of health care shall
be individuals who are outstanding in fields related
to medical, hospital, or other health activities, or
who are representative of organizations or associa-
tions of professional health practitioners.
(3) CONSUMERS.—Members who are represent-
ative of consumers of such care shall be individuals,
not engaged in and having no financial interest in
the furnishing of health services, who are familiar
with the needs of various segments of the population
for personal health services and are experienced in
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-
retarial, clerical, or other assistance as may be authorized
by the Board for carrying out their respective functions.
(h) MEETINGS.—The Council shall meet as fre-
quently as the Board deems necessary, but not less than
four times each year. Upon request by seven or more mem-
bers it shall be the duty of the Chair to call a meeting
of the Council.
(i) COMPENSATION.—Members of the Council shall
be reimbursed by the Board for travel and per diem in
lieu of subsistence expenses during the performance of du-
ties of the Board in accordance with subchapter I of chap-
ter 57 of title 5, United States Code.
(j) FACA NOT APPLICABLE.—The provisions of the
Federal Advisory Committee Act shall not apply to the
Council.
SEC. 403. PROFESSIONAL, TECHNICAL, AND TEMPORARY
ADVISORY COMMITTEES.
(a) IN GENERAL.—The Board shall appoint the
standing advisory committees specified in subsections (b)
through (f), and such other standing professional and
technical committees in order to advise it in carrying out
its duties under this Act.
(b) ADVISORY COMMITTEE ON BENEFITS.—
(1) IN GENERAL.—The Board shall appoint a
standing Advisory Committee on Benefits to advise
it with respect to the several classes of covered
services under this Act.
(2) MEMBERSHIP.—The membership of the
committee shall include individuals (in such number
as the Board may determine) drawn from the health
professions, from consumers of health services, from
providers of health services (including non-medical
licensed and non-licensed providers), or from other
sources, whom the Board deems best qualified to ad-
vise it with respect to the professional and technical
aspects of the furnishing and utilization of, and the
evaluation of, a class of covered services designated
by the Board, and with respect to the relationship
of that class of services to other covered services. In
appointing such individuals, the Board shall assure
significant representation of consumers of health
services and providers of health services.
(c) ADVISORY
COMMITTEE
ON
COST
CONTAIN-
MENT.—
(1) IN GENERAL.—The Board shall appoint a
standing Advisory Committee on Cost Containment
to advise it with respect to the payments and cost
containment measures contained in title VI of this
Act.
(2) MEMBERSHIP.—The membership of the
committee shall include individuals (in such number
as the Board may determine) with national recogni-
tion for their expertise in health economics, health
care financing, provider reimbursement, and related
fields. In appointing individuals the Board shall as-
sure significant representation of consumers of
health services and providers of health services.
(d) ADVISORY COMMITTEE ON PRIMARY CARE AND
THE MEDICALLY UNDERSERVED.—
(1) IN GENERAL.—The Board shall appoint a
standing Advisory Committee on Primary Care and
the Medically Underserved to advise it with respect
to title VII of this Act, including with respect to the
delivery of services and the education and training
of health professionals, and to consider means of in-
creasing the supply and expanding the scope of
practice of mid-level professionals and the use of
community health outreach workers and other non-
professional health care workers.
(2) MEMBERSHIP.—The membership of the
committee shall include individuals (in such number
as the Board may determine) from the health pro-
fessions and health services with expertise in—
(A) primary care services;
(B) the education and training of primary
care practitioners;
(C) the special health needs of medically
underserved populations;
(D) the training, educational, and financial
incentives that would encourage health practi-
tioners to serve in medically underserved areas;
(E) the delivery of health services through
community-based and public facilities; and
(F) developing alternative models of deliv-
ering primary health services to medically un-
derserved populations.
In appointing such individuals, the Board shall as-
sure significant representation of consumers of
health services and providers of health services.
(e) ADVISORY COMMITTEE ON MENTAL HEALTH AND
SUBSTANCE ABUSE TREATMENT SERVICES.—
(1) IN GENERAL.—The Board shall appoint a
standing Advisory Committee on Mental Health and
Substance Abuse Treatment Services to advise it
with respect to the manner in which the benefits
under this Act for mental health services and sub-
stance abuse treatment services should be modified
to best meet the objectives of this Act.
(2) MEMBERSHIP.—The membership of the
committee shall include individuals (in such number
as the Board may determine) with expertise in
health care economics, who are representative of the
multi-disciplinary range of providers of such serv-
ices, who are consumers of such services, and who
represent advocacy groups representing consumers
of such services.
(3) RESPONSIBILITIES.—The committee shall—
(A) study changes in the utilization pat-
terns and costs which accompany the provision
of mental health services and substance abuse
treatment services;
(B) study and make recommendations on
any changes that may be advisable in the utili-
zation review thresholds specified in section
204(b)(2)(A);
(C) make recommendations on ways to cre-
ate a continuum of care and encourage the pro-
vision of care in the least restrictive appropriate
setting;
(D) develop a standard set of practices for
care coordination services, including—
(i) the range of care coordination
services that should be offered for a spe-
cific target population,
(ii) the organizational structure in
which care coordination services should be
based,
(iii) the minimum training require-
ments for care coordinators, and
(iv) the standards for the clinical ne-
cessity of care coordination services,
and study (and make recommendations con-
cerning) peer care coordination services; and
(E) report any initial recommendations to
the Board by January 1, 1996.
(4) ROLE OF SUBSTANCE ABUSE AND MENTAL
HEALTH
SERVICES
ADMINISTRATION.—The Board
shall consult with the Administrator of the Sub-
stance Abuse and Mental Health Services Adminis-
tration in the appointment of members to, and
operation of, the committee.
(f) 
ADVISORY
COMMITTEE
ON
PRESCRIPTION
DRUGS.—
(1) IN GENERAL.—The Board shall appoint a
standing Advisory Committee on Prescription Drugs
to advise it with respect to the list of approved pre-
scription drugs and biologicals under section
616(a)(1) and other matters relating to the coverage
of prescription drugs under this Act.
(2) MEMBERSHIP.—
(A) IN GENERAL.—The membership of the
committee shall include individuals (in such
number as the Board may determine) with ex-
pertise in appropriate utilization of prescription
and nonprescription drug and biological thera-
pies and of the relative safety and efficacy of
prescription drugs and biologicals.
(B) AREAS OF EXPERTISE.—A majority of
the members of the committee shall be physi-
cians. Members of the committee shall include
at least a dentist, a nurse, and a pharmacist,
and individuals with special knowledge or exper-
tise in at least the following areas: geriatric, ob-
stetric, pediatric, psychiatric, and neurological
problems associated with drug therapies; clini-
cal pharmacology; pharmacoepidemiology; and
comparative clinical trials of drugs (including
statisticians and biopharmaceutic specialists).
(C) CONFLICT
OF
INTEREST
PROHIBI-
TION.—No individual who is an employee of a
manufacturer of a drug or biological or who
otherwise has a material financial interest di-
rectly or indirectly with respect to such a manu-
facturer, or who has an immediate family mem-
ber (as defined by the Board) who is such an
employee or has such an interest, shall serve as
a member of the committee.
(3) RESPONSIBILITIES.—The committee shall—
(A) continuously review scientific and med-
ical information pertaining to the relative safety
and efficacy, and the comparability, of prescrip-
tion drugs and biologicals approved for market-
ing in the United States; and
(B) recommend drug use classifications
and identify, within such a classification, drugs
that are therapeutic alternates for a given indi-
cation and indications for which particular
drugs are superior based on safety and efficacy.
The committee is not authorized to engage in drug
price negotiations nor define acceptable costs for any
product.
(4) CONSUMER INPUT.—In conducting its ac-
tivities, the committee shall solicit advice and com-
ments from a panel of consumer advocates.
(g) TEMPORARY COMMITTEES.—The Board is au-
thorized to appoint such temporary professional and tech-
nical committees as it deems necessary to advise it on spe-
cial problems not encompassed in the assignments of
standing committees appointed under this section or to
supplement the advice of standing committees.
(h) REPORTING.—Committees appointed under this
section shall report from time to time (but not less often
than biannually) to the Board, and copies of their reports
shall be transmitted by the Board to the American Health
Security Advisory Council and be made readily available
to the public.
(i) COMPENSATION.—All members of the committees
established under this section shall be reimbursed by the
Board for travel and per diem in lieu of subsistence ex-
penses during the performance of duties of the Board in
accordance with subchapter I of chapter 57 of title 5,
United States Code.
(j) ADVICE FROM PROSPECTIVE PAYMENT ASSESS-
MENT COMMISSION, PRACTITIONER PAYMENT REVIEW
COMMISSION, ETC.—For provisions relating to role of cer-
tain commissions in reviewing payment rates, see section
620.
SEC. 404. AMERICAN HEALTH SECURITY QUALITY COUNCIL.
(a) ESTABLISHMENT.—There is hereby established
an American Health Security Quality Council.
(b) APPOINTMENT AND TERMS OF MEMBERS.—
(1) IN GENERAL.—The Council shall be com-
posed of 10 members appointed by the President.
The President shall first appoint individuals on a
timely basis so as to provide for the operation of the
Council by not later than January 1, 1995.
(2) SELECTION OF MEMBERS.—Each member
of the Council shall be a member of a health profes-
sion. Six members of the Council shall be physicians.
Individuals shall be appointed to the Council on the
basis of national reputations for clinical and aca-
demic excellence.
(3) TERMS
OF
MEMBERS.—Individuals ap-
pointed to the Council shall serve for a term of 5
years, except that the terms of 4 of the individuals
initially appointed shall be, as designated by the
President at the time of their appointment, for 1, 2,
3, and 4 years.
(c) VACANCIES.—
(1) IN GENERAL.—The President shall fill any
vacancy in the membership of the Council in the
same manner as the original appointment. The va-
cancy shall not affect the power of the remaining
members to execute the duties of the Council.
(2) VACANCY
APPOINTMENTS.—Any member
appointed to fill a vacancy shall serve for the re-
mainder of the term for which the predecessor of the
member was appointed.
(3) REAPPOINTMENT.—The President may re-
appoint a member of the Council for a second term
in the same manner as the original appointment. A
member who has served for two consecutive 5-year
terms shall not be eligible for reappointment until
two years after the member has ceased to serve.
(d) CHAIR.—The President shall designate one of the
members of the Council to serve at the will of the Presi-
dent as Chair of the Council.
(e) COMPENSATION.—Members of the Council who
are not employees of the Federal Government shall be en-
titled to compensation at a level equivalent to level II of
the Executive Schedule, in accordance with section 5313
of title 5, United States Code.
(f) GENERAL DUTIES OF THE COUNCIL.—The Coun-
cil is responsible for quality review activities under title
V. The Council shall report to the Board annually on the
conduct of activities under such title and shall report to
the Board annually specifically on findings from outcomes
research and development of practice guidelines that may
affect the Board’s determination of coverage of services
under section 401(f)(1)(G).
SEC. 405. STATE HEALTH SECURITY PROGRAMS.
(a) SUBMISSION OF PLANS.—
(1) IN GENERAL.—Each State shall submit to
the Board a plan for a State health security pro-
gram for providing for health care services to the
residents of the State in accordance with this Act.
(2) REGIONAL PROGRAMS.—A State may join
with one or more neighboring States to submit to
the Board a plan for a regional health security pro-
gram instead of separate State health security
programs.
(3) REGIONAL
PLANNING
MECHANISMS.—The
Board shall provide incentives for States to develop
regional planning mechanisms to promote the ration-
al distribution of, adequate access to, and efficient
use of, tertiary care facilities, equipment, and
services.
(b) REVIEW AND APPROVAL OF PLANS.—
(1) IN
GENERAL.—The Board shall review
plans submitted under subsection (a) and determine
whether such plans meet the requirements for ap-
proval. The Board shall not approve such a plan un-
less it finds that the plan (or State law) provides,
consistent with the provisions of this Act, for the
following:
(A) Payment for required health services
for eligible individuals in the State in accord-
ance with this Act.
(B) Adequate administration, including the
designation of a single State agency responsible
for the administration (or supervision of the
administration) of the program.
(C) The establishment of a State health
security budget.
(D) Establishment of payment methodolo-
gies (consistent with subtitle B of title VII).
(E) Assurances that individuals have the
freedom to choose practitioners and other
health care providers for services covered under
this Act.
(F) A procedure for carrying out long-term
regional management and planning functions
with respect to the delivery and distribution of
health care services that—
(i) ensures participation of consumers
of health services and providers of health
services, and
(ii) gives priority to the most acute
shortages and maldistributions of health
personnel and facilities and the most seri-
ous deficiencies in the delivery of covered
services and to the means for the speedy
alleviation of these shortcomings.
(G) The licensure and regulation of all
health providers and facilities to ensure compli-
ance with Federal and State laws and to
promote quality of care.
(H) Establishment of a quality review sys-
tem in accordance with section 502.
(I) Establishment of an independent om-
budsman for consumers to register complaints
about the organization and administration of
the State health security program and to help
resolve complaints and disputes between con-
sumers and providers.
(J) Publication of an annual report on the
operation of the State health security program,
which report shall include information on cost,
progress towards achieving full enrollment, pub-
lic access to health services, quality review,
health outcomes, health professional training,
and 
the 
needs 
of 
medically 
underserved
populations.
(K) Provision of a fraud and abuse preven-
tion and control unit that the Inspector General
determines meets the requirements of section
413(a).
(L) Provision that—
(i) all claims or requests for payment
for services shall be accompanied by the
unique provider identifier assigned under
section 414(a) to the provider and the
unique patient identifier assigned to the
individual under section 414(b);
(ii) no payment shall be made under
the program for the provision of health
care services by any provider unless the
provider has furnished the program with
the unique provider identifier assigned
under section 414(a);
(iii) the plan shall use the unique pa-
tient identifier assigned under section
414(b) to an individual as the identifier of
the individual in the processing of claims
and other purposes (as specified by the
Board); and
(iv) 
queries 
made 
under 
section
412(c)(2) shall be made using the unique
provider identifier specified under section
414(a).
(M) Prohibit payment in cases of prohib-
ited physician referrals under section 304.
(N) Effective January 1, 2001, provide for
use of a uniform electronic data base in accord-
ance with section 504(a).
(2) CONSEQUENCES OF FAILURE TO COMPLY.—
If the Board finds that a State plan submitted
under paragraph (1) does not meet the requirements
for approval under this section or that a State
health security program or specific portion of such
program, the plan for which was previously ap-
proved, no longer meets such requirements, the
Board shall provide notice to the State of such fail-
ure and that unless corrective action is taken within
a period specified by the Board, the Board shall
place the State health security program (or specific
portions of such program) in receivership under the
jurisdiction of the Board.
(c) STATE HEALTH SECURITY ADVISORY COUN-
CILS.—
(1) IN GENERAL.—For each State, the Gov-
ernor shall provide for appointment of a State
Health Security Advisory Council to advise and
make recommendations to the Governor and State
with respect to the implementation of the State
health security program in the State.
(2) MEMBERSHIP.—Each State Health Security
Advisory Council shall be composed of at least 11 in-
dividuals. The appointed members shall include indi-
viduals who are representative of the State health
security program, public health professionals, provid-
ers of health services, and of individuals (who shall
constitute a majority) who are representative of con-
sumers of such services, including a balanced
representation of employers, unions and consumer
organizations.
(3) DUTIES.—
(A) IN GENERAL.—Each State Health Se-
curity Advisory Council shall review, and sub-
mit comments to the Governor concerning the
implementation of the State health security pro-
gram in the State.
(B) ASSISTANCE.—Each State Health Se-
curity Advisory Council shall provide assistance
and technical support to community organiza-
tions and public and private non-profit agencies
submitting applications for funding under ap-
propriate State and Federal public health pro-
grams, with particular emphasis placed on as-
sisting those applicants with broad consumer
representation.
(d) STATE USE OF FISCAL AGENTS.—
(1) IN GENERAL.—Each State health security
program, using competitive bidding procedures, may
enter into such contracts with qualified entities, such
as voluntary associations, as the State determines to
be appropriate to process claims and to perform
other related functions of fiscal agents under the
State health security program.
(2) RESTRICTION.—Except as the Board may
provide for good cause shown, in no case may more
than one contract described in paragraph (1) be
entered into under a State health security program.
SEC. 
406. 
COMPLEMENTARY 
CONDUCT 
OF 
RELATED
HEALTH PROGRAMS.
In performing functions with respect to health per-
sonnel education and training, health research, environ-
mental health, disability insurance, vocational rehabilita-
tion, the regulation of food and drugs, and all other mat-
ters pertaining to health, the Secretary of Health and
Human Services shall direct all activities of the Depart-
ment of Health and Human Services toward contributions
to the health of the people complementary to this Act.
Subtitle B—Control Over Fraud
and Abuse
SEC. 411. APPLICATION OF FEDERAL SANCTIONS TO ALL
FRAUD 
AND 
ABUSE 
UNDER 
AMERICAN
HEALTH SECURITY PROGRAM.
The following sections of the Social Security Act shall
apply to State health security programs in the same man-
ner as they apply to State medical assistance plans under
title XIX of such Act (except that in applying such provi-
sions any reference to the Secretary is deemed a reference
to the Board):
(1) Section 1128 (relating to exclusion of indi-
viduals and entities).
(2) Section 1128A (civil monetary penalties).
(3) Section 1128B (criminal penalties).
(4) Section 1124 (relating to disclosure of own-
ership and related information).
(5) Section 1126 (relating to disclosure of cer-
tain owners).
SEC. 412. NATIONAL HEALTH CARE FRAUD DATA BASE.
(a) ESTABLISHMENT.—The American Health Secu-
rity Standards Board, through the Inspector General,
shall establish a national data base (in this section
referred to as the ‘‘data base’’) containing information
relating to health care fraud and abuse.
(b) DATA INCLUDED.—
(1) IN GENERAL.—The data base shall include
such information as the Inspector General, in con-
sultation with the Board, shall specify, and shall
include at least the information described in
paragraph (2).
(2) SPECIFIED
INFORMATION.—The informa-
tion specified in this paragraph is, with respect to
providers of health care services, the identity of any
provider—
(A) that has been convicted of a crime for
which the provider may be excluded from par-
ticipation under a health program (as defined
in paragraph (3));
(B) whose license to provide health care
has been revoked or suspended (as described in
section 1128(b)(5) of the Social Security Act);
(C) that has been excluded or suspended
from a health program under section 1128 of
the Social Security Act or from any other
Federal or State health care program;
(D) with respect to whom a civil money
penalty has been imposed under this Act or the
Social Security Act; or
(E) that otherwise is subject to exclusion
from participation under a health program.
(3) HEALTH PROGRAM DEFINED.—In this sec-
tion, the term ‘‘health program’’ means a State
health security program and includes the medicare
program (under title XVIII of the Social Security
Act) and a State health care program (as defined in
section 1128(h) of such Act).
(c) REPORTING REQUIREMENT.—
(1) REPORTING.—Each State health security
program shall provide such information to the In-
spector General as the Inspector General may re-
quire in order to carry out fraud and abuse control
activities and for purposes of maintaining the data
base.
(2) QUERYING.—In accordance with rules es-
tablished by the Board (in consultation with the In-
spector General), each State health security program
shall query periodically (as specified by the Inspector
General)—
(A) the data base to determine if providers
of health services for which the program makes
payment are not disqualified from providing
such services, and
(B) the Secretary of Health and Human
Services, concerning information obtained by
the Secretary under part B of the Health Care
Quality Improvement Act of 1986 relating to
practitioners.
(3) COORDINATION WITH MALPRACTICE DATA
BASE.—The Secretary of Health and Human Serv-
ices shall provide for the coordination of the report-
ing and disclosure of information under this section
with information under part B of the Health Care
Quality Improvement Act of 1986.
(4) UNIFORM MANNER.—Information shall be
reported under this subsection in a uniform manner
(in accordance with standards of the Inspector Gen-
eral) that permits aggregation of reported informa-
tion.
(5) ACCESS FOR AUDIT.—Each State health se-
curity program shall provide the Inspector General
such access to information as may be required to
verify the information reported under this sub-
section.
(6) PENALTY FOR FALSE INFORMATION.—Any
person that submits false information required to be
provided under this subsection or that denies access
to information under paragraph (5) may be impris-
oned for not more than 5 years, or fined, or both,
in accordance with title 18, United States Code.
(7) CONFIDENTIALITY.—The Board shall estab-
lish rules that protect the confidentiality of the
information in the data base.
SEC. 413. REQUIREMENTS FOR OPERATION OF STATE
HEALTH CARE FRAUD AND ABUSE CONTROL
UNITS.
(a) REQUIREMENT.—In order to meet the require-
ment of section 405(b)(1)(K), each State health security
program must establish and maintain a health care fraud
and abuse control unit (in this section referred to as a
‘‘fraud unit’’) that meets requirements of this section and
other requirements of the Board. Such a unit may be a
State medicaid fraud control unit (described in section
1903(q) of the Social Security Act).
(b) STRUCTURE OF UNIT.—The fraud unit must—
(1) be a single identifiable entity of the State
government;
(2) be separate and distinct from the State
agency with principal responsibility for the adminis-
tration of the State health security program; and
(3) meet 1 of the following requirements:.
(A) It must be a unit of the office of the
State Attorney General or of another depart-
ment of State government which possesses
statewide authority to prosecute individuals for
criminal violations.
(B) If it is in a State the constitution of
which does not provide for the criminal prosecu-
tion of individuals by a statewide authority and
has formal procedures, approved by the Board,
that (i) assure its referral of suspected criminal
violations relating to the State health insurance
plan to the appropriate authority or authorities
in the States for prosecution, and (ii) assure its
assistance of, and coordination with, such au-
thority or authorities in such prosecutions.
(C) It must have a formal working rela-
tionship with the office of the State Attorney
General and have formal procedures (including
procedures for its referral of suspected criminal
violations to such office) which are approved by
the Board and which provide effective coordina-
tion of activities between the fraud unit and
such office with respect to the detection, inves-
tigation, and prosecution of suspected criminal
violations relating to the State health insurance
plan.
(c) FUNCTIONS.—The fraud unit must—
(1) have the function of conducting a statewide
program for the investigation and prosecution of vio-
lations of all applicable State laws regarding any
and all aspects of fraud in connection with any as-
pect of the provision of health care services and ac-
tivities of providers of such services under the State
health security program;
(2) have procedures for reviewing complaints of
the abuse and neglect of patients of providers and
facilities that receive payments under the State
health security program, and, where appropriate, for
acting upon such complaints under the criminal laws
of the State or for referring them to other State
agencies for action; and
(3) provide for the collection, or referral for col-
lection to a single State agency, of overpayments
that are made under the State health security pro-
gram to providers and that are discovered by the
fraud unit in carrying out its activities.
(d) RESOURCES.—The fraud unit must—
(1) employ such auditors, attorneys, investiga-
tors, and other necessary personnel,
(2) be organized in such a manner, and
(3) provide sufficient resources (as specified by
the Board),
as is necessary to promote the effective and efficient con-
duct of the unit’s activities.
(e) COOPERATIVE AGREEMENTS.—The fraud unit
must have cooperative agreements (as specified by the
Board) with—
(1) similar fraud units in other States,
(2) the Inspector General, and
(3) the Attorney General of the United States.
(f) REPORTS.—The fraud unit must submit to the
Inspector General an application and annual reports con-
taining such information as the Inspector General deter-
mines to be necessary to determine whether the unit meets
the previous requirements of this section.
SEC. 414. ASSIGNMENT OF UNIQUE PROVIDER AND PA-
TIENT IDENTIFIERS.
(a) PROVIDER IDENTIFIERS.—
(1) IN GENERAL.—The Board shall provide for
the assignment, to each individual or entity provid-
ing health care services under a State health secu-
rity program, of a unique provider identifier.
(2) RESPONSE TO QUERIES.—Upon the request
of a State health security program with respect to
a provider, the Board shall provide the program with
the unique provider identifier (if any) assigned to
the provider under paragraph (1).
(b) PATIENT IDENTIFIERS.—The Board shall provide
for the assignment, to each eligible individual, of a unique
patient identifier. The identifier so assigned may be the
Social Security account number of the individual.
(c) REQUIREMENT
TO USE IDENTIFIERS.—Each
State health security program is required under section
405(b)(1)(L) to use the unique identifiers assigned under
this section.
TITLE V—QUALITY ASSESSMENT
SEC. 501. FUNCTIONS OF QUALITY COUNCIL; DEVELOP-
MENT OF PRACTICE GUIDELINES AND APPLI-
CATION TO OUTLIERS.
(a) DEVELOPMENT OF PRACTICE GUIDELINES.—The
American Health Security Quality Council (in this title
referred to as the ‘‘Council’’)—
(1) shall collect data from outcomes research,
including data on patient satisfaction and post-hos-
pital discharge experience, on an ongoing basis
(whether conducted by the Federal Government or
other entities), and
(2) on the basis of such data and existing
clinical knowledge, shall develop practice guidelines.
Such guidelines may vary based upon the area in which
the services are provided and the degree of training, spe-
cialization, or similar characteristics of providers. Such
guidelines must be updated on an annual basis and based
on monitoring of outcomes research and other clinical
data. Such guidelines shall be based on the degree to
which a process of care increases the probability of desired
patient outcomes.
(b) PROFILING OF PATTERNS OF PRACTICE; IDENTI-
FICATION OF OUTLIERS.—The Council shall adopt meth-
odologies for profiling the patterns of practice of health
care professionals and for identifying outliers (as defined
in subsection (f)).
(c) CENTERS OF EXCELLENCE.—The Council shall
develop guidelines for certain medical procedures des-
ignated by the Board to be performed only at tertiary care
centers which can meet standards for frequency of proce-
dure performance and intensity of support mechanisms
that are consistent with the high probability of desired pa-
tient outcome. Reimbursement under this Act for such a
designated procedure may only be provided if the
procedure was performed at a center that meets such
standards.
(d) REMEDIAL ACTIONS.—The Council shall develop
standards for education and sanctions with respect to
outliers so as to assure the quality of health care services
provided under this Act.
(e) DISSEMINATION.—The Council shall disseminate
to the State—
(1) the guidelines developed under subsections
(a) and (c),
(2) the methodologies adopted under subsection
(b), and
(3) the standards developed under subsection
(d),
for use by the States under section 502.
(f) OUTLIER DEFINED.—In this title, the term
‘‘outlier’’ means a health care provider whose pattern of
practice, relative to applicable practice guidelines, suggests
deficiencies in the quality of health care services being
provided.
SEC. 502. STATE QUALITY REVIEW PROGRAMS.
(a) REQUIREMENT.—In order to meet the require-
ment of section 405(b)(1)(H), each State health security
program shall establish one or more qualified entities to
conduct quality reviews of persons providing covered serv-
ices under the program, in accordance with standards es-
tablished under subsection (b)(1) (except as provided in
subsection (b)(2)) and subsection (d).
(b) FEDERAL STANDARDS.—
(1) IN GENERAL.—The Council shall establish
standards with respect to—
(A) the adoption of practice guidelines (de-
veloped under section 501(a)),
(B) the identification of outliers (consist-
ent with methodologies adopted under section
501(b)),
(C) the development of remedial programs
and monitoring for outliers, and
(D) the application of sanctions (consistent
with the standards developed under section
501(c)).
(2) STATE DISCRETION.—A State may apply
under subsection (a) standards other than those es-
tablished under paragraph (1) so long as the State
demonstrates to the satisfaction of the Council on an
annual basis that the standards applied have been as
efficacious in promoting and achieving improved
quality of care as the application of the standards
established under paragraph (1). Positive improve-
ments in quality shall be documented by reductions
in the variations of clinical care process and
improvement in patient outcomes.
(c) QUALIFICATIONS.—
(1) IN GENERAL.—An entity is not qualified to
conduct quality reviews under subsection (a) unless
the entity—
(A) is administratively independent of the
individual or board that administers the State
health security program, and
(B) does not provide any financial incen-
tive to reviewers to favor one pattern of practice
over another.
(2) PROVIDER-SPECIFIC ENTITIES.—Subject to
paragraph (1), a State may provide that an individ-
ual hospital (or other institutional provider) may
serve as a qualified entity to conduct quality reviews
under subsection (a).
SEC. 503. ELIMINATION OF UTILIZATION REVIEW PRO-
GRAMS; TRANSITION.
(a) INTENT.—It is the intention of this title to re-
place by January 1, 1998, random utilization controls with
a systematic review of patterns of practice that com-
promise the quality of care.
(b) SUPERSEDING CASE REVIEWS.—
(1) IN
GENERAL.—Subject to the succeeding
provisions of this subsection, the program of quality
review provided under the previous sections of this
title supersede all existing Federal requirements for
utilization review programs, including requirements
for random case-by-case reviews and programs re-
quiring pre-certification of medical procedures on a
case-by-case basis.
(2) TRANSITION.—Before January 1, 1998, the
Board and the States may employ existing utiliza-
tion review standards and mechanisms as may be
necessary to effect the transition to pattern of prac-
tice-based reviews.
(3) CONSTRUCTION.—Nothing in this sub-
section shall be construed—
(A) as precluding the case-by-case review
of the provision of care—
(i) in individual incidents where the
quality of care has significantly deviated
from acceptable standards of practice, and
(ii) with respect to a provider who has
been determined to be an outlier; or
(B) as precluding the case management of
catastrophic, mental health, or substance abuse
cases where such management is necessary to
achieve appropriate, cost-effective, and bene-
ficial comprehensive medical care, as provided
for in section 204.
SEC. 504. DEVELOPMENT OF NATIONAL ELECTRONIC DATA
BASE.
(a) USE BY STATES.—In order to meet the require-
ment 
of 
this 
section, 
for 
purposes 
of 
section
405(b)(1)(N)), each State health security program shall
develop and use a uniform electronic data base which uses
the software designated under subsection (b) and which
assures confidentiality under subsection (c), for all patient
records in order to enable systematic quality review and
outcomes analysis. Subject to subsection (c), data in such
data base shall be made available, under rules established
by the Board, in order to facilitate the portability of pa-
tient records and comparative outcomes research analysis.
(b) UNIFORM SOFTWARE.—The Board shall des-
ignate the uniform software that shall be used by States
in the operation of their electronic data bases, in order
to facilitate the portability of patient records and com-
parative outcomes research analysis. The Board shall not
grant any waiver of the requirement of the previous
sentence.
(c) CONFIDENTIALITY.—The Board shall establish
standards that are designed to protect the privacy and
otherwise shield the identity of the patients whose records
are included in the data base. Under such standards, gov-
ernment agencies shall not have access to information in
the data base that will identify individual patients except
in cases of quality review procedures which require that
individual patients be informed of necessary changes in
their treatment.
TITLE 
VI—HEALTH 
SECURITY
BUDGET; 
PAYMENTS; 
COST
CONTAINMENT MEASURES
Subtitle A—Budgeting and
Payments to States
SEC. 601. NATIONAL HEALTH SECURITY BUDGET.
(a) NATIONAL HEALTH SECURITY BUDGET.—
(1) IN GENERAL.—By not later than September
1 before the beginning of each year (beginning with
1995), the Board shall establish a national health
security budget, which—
(A) specifies the total expenditures (includ-
ing expenditures for administrative costs) to be
made by the Federal Government and the
States for covered health care services under
this Act, and
(B) allocates those expenditures among the
States consistent with section 604.
Pursuant to subsection (b), such budget for a year
shall not exceed the budget for the preceding year
increased by the percentage increase in gross domes-
tic product.
(2) DIVISION OF BUDGET INTO COMPONENTS.—
The national health security budget shall consist of
at least 4 components:
(A) A component for quality assessment
activities (described in title V).
(B) A component for health professional
education expenditures.
(C) A component for administrative costs.
(D) A component (in this title referred to
as the ‘‘operating component’’) for operating
and other expenditures not described in sub-
paragraphs (A) through (C), consisting of
amounts not included in the other components.
A State may provide for the allocation of this
component between capital expenditures and
other expenditures.
(3) ALLOCATION AMONG COMPONENTS.—Tak-
ing into account the State health security budgets
established and submitted under section 603, the
Board shall allocate the national health security
budget among the components in a manner that—
(A) assures a fair allocation for quality as-
sessment activities (consistent with the national
health security spending growth limit); and
(B) assures that the health professional
education expenditure component is sufficient
to provide for the amount of health professional
education expenditures sufficient to meet the
need for covered health care services (consistent
with the national health security spending
growth limit under subsection (b)(2)).
(b) BASIS FOR TOTAL EXPENDITURES.—
(1) IN GENERAL.—The total expenditures speci-
fied in such budget shall be the sum of the capita-
tion amounts computed under section 602(a) and
the amount of Federal administrative expenditures
needed to carry out this Act.
(2) NATIONAL
HEALTH
SECURITY
SPENDING
GROWTH LIMIT.—For purposes of this subtitle, the
national health security spending growth limit de-
scribed in this paragraph for a year is zero, or, if
greater, the percentage increase in the gross domes-
tic product (in current dollars) from the first quar-
ter of the second previous year to the first quarter
of the previous year.
(c) DEFINITIONS.—In this title:
(1) CAPITAL EXPENDITURES.—The term ‘‘cap-
ital expenditures’’ means expenses for the purchase,
lease, construction, or renovation of capital facilities
and for equipment and includes return on equity
capital.
(2) HEALTH
PROFESSIONAL
EDUCATION
EX-
PENDITURES.—The term ‘‘health professional edu-
cation expenditures’’ means expenditures in hospitals
and other health care facilities to cover costs associ-
ated with teaching and related research activities.
SEC. 602. COMPUTATION OF INDIVIDUAL AND STATE CAPI-
TATION AMOUNTS.
(a) CAPITATION AMOUNTS.—
(1) INDIVIDUAL CAPITATION AMOUNTS.—In es-
tablishing the national health security budget under
section 601(a) and in computing the national aver-
age per capita cost under subsection (b) for each
year, the Board shall establish a method for comput-
ing the capitation amount for each eligible individual
residing in each State. The capitation amount for an
eligible individual in a State classified within a risk
group (established under subsection (d)(2)) is the
product of—
(A) a national average per capita cost for
all covered health care services (computed
under subsection (b)),
(B) the State adjustment factor (estab-
lished under subsection (c)) for the State, and
(C) the risk adjustment factor (established
under subsection (d)) for the risk group.
(2) STATE CAPITATION AMOUNT.—
(A) IN GENERAL.—For purposes of this
title, the term ‘‘State capitation amount’’
means, for a State for a year, the sum of the
capitation amounts computed under paragraph
(1) for all the residents of the State in the year,
as estimated by the Board before the beginning
of the year involved.
(B) USE
OF
STATISTICAL
MODEL.—The
Board may provide for the computation of
State capitation amounts based on statistical
models that fairly reflect the elements that com-
prise the State capitation amount described in
subparagraph (A).
(C) POPULATION INFORMATION.—The Bu-
reau of the Census shall assist the Board in de-
termining the number, place of residence, and
risk group classification of eligible individuals.
(b) COMPUTATION OF NATIONAL AVERAGE PER CAP-
ITA COST.—
(1) FOR 1995.—For 1995, the national average
per capita cost under this paragraph is equal to—
(A) the average per capita health care ex-
penditures in the United States in 1993 (as
estimated by the Board),
(B) increased to 1994 by the Board’s esti-
mate of the actual amount of such per capita
expenditures during 1994, and
(C) updated to 1995 by the national health
security spending growth limit specified in sec-
tion 601(b)(2) for 1995.
(2) FOR SUCCEEDING YEARS.—For each suc-
ceeding year, the national average per capita cost
under this subsection is equal to the national aver-
age per capita cost computed under this subsection
for the previous year increased by the national
health security spending growth limit (specified in
section 601(b)(2)) for the year involved.
(c) STATE ADJUSTMENT FACTORS.—
(1) IN
GENERAL.—Subject to the succeeding
paragraphs of this subsection, the Board shall de-
velop for each State a factor to adjust the national
average per capita costs to reflect differences
between the State and the United States in—
(A) average labor and nonlabor costs that
are necessary to provide covered health services;
(B) any social, environmental, or geo-
graphic condition affecting health status or the
need for health care services, to the extent such
a condition is not taken into account in the es-
tablishment of risk groups under subsection (d);
(C) the geographic distribution of the
State’s population, particularly the proportion
of the population residing in medically under-
served areas, to the extent such a condition is
not taken into account in the establishment of
risk groups under subsection (d); and
(D) any other factor relating to operating
costs required to assure equitable distribution
of funds among the States.
(2) MODIFICATION OF HEALTH PROFESSIONAL
EDUCATION COMPONENT.—With respect to the por-
tion of the national health security budget allocated
to expenditures for health professional education, the
Board shall modify the State adjustment factors so
as to take into account—
(A) differences among States in health
professional education programs in operation as
of the date of the enactment of this Act, and
(B) differences among States in their rel-
ative need for expenditures for health profes-
sional education, taking into account the health
professional education expenditures proposed in
State health security budgets under section
603(a).
(3) BUDGET NEUTRALITY.—The State adjust-
ment factors, as modified under paragraph (2), shall
be applied under this subsection in a manner that
results in neither an increase nor a decrease in the
total amount of the Federal contributions to all
State health security programs under subsection (b)
as a result of the application of such factors.
(4) PHASE-IN.—In applying State adjustment
factors under this subsection during the five-year pe-
riod beginning with 1995, the Board shall phase-in,
over such period, the use of factors described in
paragraph (1) in a manner so that the adjustment
factor for a State is based on a blend of such factors
and a factor that reflects the relative actual average
per capita costs of health services of the different
States as of the time of enactment of this Act.
(5) PERIODIC
ADJUSTMENT.—In establishing
the national health security budget before the begin-
ning of each year, the Board shall provide for appro-
priate adjustments in the State adjustment factors
under this subsection.
(d) ADJUSTMENTS FOR RISK GROUP CLASSIFICA-
TION.—
(1) IN GENERAL.—The Board shall develop an
adjustment factor to the national average per capita
costs computed under subsection (b) for individuals
classified in each risk group (as designated under
paragraph (2)) to reflect the difference between the
average national average per capita costs and the
national average per capita cost for individuals clas-
sified in the risk group.
(2) RISK GROUPS.—The Board shall designate
a series of risk groups, determined by age, health in-
dicators, and other factors that represent distinct
patterns of health care services utilization and costs.
(3) PERIODIC
ADJUSTMENT.—In establishing
the national health security budget before the begin-
ning of each year, the Board shall provide for appro-
priate adjustments in the risk adjustment factors
under this subsection.
SEC. 603. STATE HEALTH SECURITY BUDGETS.
(a) ESTABLISHMENT AND SUBMISSION OF BUDG-
ETS.—
(1) IN GENERAL.—Each State health security
program shall establish and submit to the Board for
each year a proposed and a final State health secu-
rity budget, which specifies the following:
100
(A) The total expenditures (including ex-
penditures for administrative costs) to be made
under the program in the State for covered
health care services under this Act, consistent
with subsection (b), broken down as follows:
(i) By the 4 components (described in
section 601(a)(2)), consistent with sub-
section (b).
(ii) Within the operating component—
(I) expenditures for operating
costs of hospitals and other facility-
based services in the State,
(II) expenditures for payment to
comprehensive health service organiza-
tions,
(III) expenditures for payment of
services provided by health care prac-
titioners, and
(IV) expenditures for other cov-
ered items and services.
Amounts included in the operating compo-
nent include amounts that may be used by
providers for capital expenditures.
(B) The total revenues required to meet
the State health security expenditures.
101
(2) PROPOSED BUDGET DEADLINE.—The pro-
posed budget for a year shall be submitted under
paragraph (1) not later than June 1 before the year.
(3) FINAL BUDGET.—The final budget for a
year shall—
(A) be established and submitted under
paragraph (1) not later than October 1 before
the year, and
(B) take into account the amounts estab-
lished under the national health security budget
under section 601 for the year.
(4) 
ADJUSTMENT
IN
ALLOCATIONS
PER-
MITTED.—
(A) IN
GENERAL.—Subject to subpara-
graphs (B) and (C), in the case of a final
budget, a State may change the allocation of
amounts among components.
(B) NOTICE.—No such change may be
made unless the State has provided prior notice
of the change to the Board.
(C) DENIAL.—Such a change may not be
made if the Board, within such time period as
the Board specifies, disapproves such change.
(b) EXPENDITURE LIMITS.—
102
(1) IN GENERAL.—The total expenditures speci-
fied in each State health security budget under sub-
section (a)(1) shall take into account Federal
contributions made under section 604.
(2) LIMIT ON CLAIMS PROCESSING AND BILL-
ING
EXPENDITURES.—Each State health security
budget shall provide that State administrative ex-
penditures, including expenditures for claims proc-
essing and billing, shall not exceed 3 percent of the
total expenditures under the State health security
program, unless the Board determines, on a case-by-
case basis, that additional administrative expendi-
tures would improve health care quality and cost
effectiveness.
(3) WORKER ASSISTANCE.—A State health se-
curity program may provide that, for budgets for
years before 2000, up to 1 percent of the budget
may be used for purposes of programs providing as-
sistance to workers who are currently performing
functions in the administration of the health insur-
ance system and who may experience economic dis-
location as a result of the implementation of the
program.
(c) APPROVAL PROCESS
FOR CAPITAL EXPENDI-
TURES PERMITTED.—Nothing in this title shall be con-
103
strued as preventing a State health security program from
providing for a process for the approval of capital expendi-
tures based on information derived from regional planning
agencies.
SEC. 604. FEDERAL PAYMENTS TO STATES.
(a) IN GENERAL.—Each State with an approved
State health security program is entitled to receive, from
amounts in the National Health Security Trust Fund, on
a monthly basis each year, of an amount equal to one-
twelfth of the product of—
(1) the State capitation amount (computed
under section 602(a)(2)) for the State for the year,
and
(2) the Federal contribution percentage (estab-
lished under subsection (b)).
(b) FEDERAL CONTRIBUTION PERCENTAGE.—The
Board shall establish a formula for the establishment of
a Federal contribution percentage for each State. Such
formula shall take into consideration a State’s per capita
income and revenue capacity and such other relevant eco-
nomic indicators as the Board determines to be appro-
priate. In addition, during the 5-year period beginning
with 1995, the Board may provide for a transition adjust-
ment to the formula in order to take into account current
expenditures by the State (and local governments thereof)
104
for health services covered under the State health security
program. The weighted-average Federal contribution per-
centage for all States shall equal 86 percent and in no
event shall such percentage be less than 81 percent nor
more than 91 percent.
(c) USE OF PAYMENTS.—All payments made under
this section may only be used to carry out the State health
security program.
(d) EFFECT OF SPENDING EXCESS OR SURPLUS.—
(1) SPENDING EXCESS.—If a State exceeds it’s
budget in a given year, the State shall continue to
fund covered health services from its own revenues.
(2) SURPLUS.—If a State provides all covered
health services for less than the budgeted amount
for a year, it may retain its Federal payment for
that year for uses consistent with this Act.
SEC. 605. ACCOUNT FOR HEALTH PROFESSIONAL EDU-
CATION EXPENDITURES.
(a) SEPARATE ACCOUNT.—Each State health secu-
rity program shall—
(1) include a separate account for health pro-
fessional education expenditures, and
(2) specify the general manner, consistent with
subsection (b), in which such expenditures are to be
105
distributed among different types of institutions and
the different areas of the State.
(b) DISTRIBUTION
RULES.—The distribution of
funds to hospitals and other health care facilities from the
account must conform to the following principles:
(1) The disbursement of funds must be consist-
ent with achievement of the national and program
goals (specified in section 701(b)) within the State
health security program and the distribution of
funds from the account must be conditioned upon
the receipt of such reports as the Board may require
in order to monitor compliance with such goals.
(2) The distribution of funds from the account
must take into account the potentially higher costs
of placing health professional students in clinical
education programs in health professional shortage
areas.
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.
(a) DIRECT PAYMENT UNDER GLOBAL BUDGET.—
Payment for operating expenses for institutional and facil-
106
ity-based care, including hospital services and nursing fa-
cility services, under State health security programs shall
be made directly to each institution or facility by each
State health security program under an annual prospec-
tive global budget approved under the program. Such a
budget shall include payment for outpatient care and non-
facility-based care that is furnished by or through the fa-
cility. In the case of a hospital that is wholly owned (or
controlled) by a comprehensive health service organization
that is paid under section 614 on the basis of a global
budget, the global budget of the organization shall include
the budget for the hospital.
(b) ANNUAL NEGOTIATIONS; BUDGET APPROVAL.—
(1) IN GENERAL.—The prospective global budg-
et for an institution or facility shall be developed
through annual negotiations between the State
health security program and the institution or facil-
ity and be based on a nationally uniform system of
cost accounting established under standards of the
Board.
(2) CONSIDERATIONS.—In developing a budget
through negotiations, there shall be taken into
account at least the following:
107
(A) With respect to inpatient hospital serv-
ices, the number, and classification by diag-
nosis-related group, of discharges.
(B) An institution’s or facility’s past ex-
penditures.
(C) The extent to which debt service for
capital expenditures has been included in the
proposed operating budget.
(D) Change in the consumer price index
and other price indices.
(E) The cost of reasonable compensation
to health care practitioners.
(F) The compensation level of the institu-
tion’s or facility’s workforce.
(G) The extent to which the institution or
facility is providing health care services to meet
the needs of residents in the area served by the
institution or facility, including the institution’s
or facility’s occupancy level.
(H) The institution’s or facility’s previous
financial and clinical performance, based on uti-
lization and outcomes data provided under this
Act.
(I) The type of institution or facility, in-
cluding whether the institution or facility is
108
part of a clinical education program or serves
a health professional education, research or
other training purpose.
(J) Technological advances or changes.
(K) Costs of the institution or facility asso-
ciated with meeting Federal and State regula-
tions.
(L) The costs associated with necessary
public outreach activities.
(M) In the case of a for-profit facility, a
reasonable rate of return on equity capital,
independent of those operating expenses nec-
essary to fulfill the objectives of this Act.
(N) Incentives to facilities that maintain
costs below previous reasonable budgeted levels
without reducing the care provided.
(O) With respect to facilities that provide
mental health services and substance abuse
treatment services, any additional costs involved
in the treatment of dually diagnosed individ-
uals.
The portion of such a budget that relates to expendi-
tures for health professional education shall be con-
sistent with the State health security budget for
such expenditures.
109
(3) PROVISION OF REQUIRED INFORMATION; DI-
AGNOSIS-RELATED GROUP.—No budget for an insti-
tution or facility for a year may be approved unless
the institution or facility has submitted on a timely
basis to the State health security program such in-
formation as the program or the Board shall specify,
including in the case of hospitals information on dis-
charges classified by diagnosis-related group.
(c) ADJUSTMENTS IN APPROVED BUDGETS.—
(1) ADJUSTMENTS TO GLOBAL BUDGETS THAT
CONTRACT WITH COMPREHENSIVE HEALTH SERVICE
ORGANIZATIONS.—Each State health security pro-
gram shall develop an administrative mechanism for
reducing operating funds to institutions or facilities
in proportion to payments made to such institutions
or facilities for services contracted for by a com-
prehensive health service organization.
(2) AMENDMENTS.—In accordance with stand-
ards established by the Board, an operating and
capital budget approved under this section for a year
may be amended before, during, or after the year if
there is a substantial change in any of the factors
relevant to budget approval.
(d) DONATIONS PERMISSIBLE.—The States health
security programs may permit institutions and facilities
110
to raise funds from private sources to pay for newly con-
structed facilities, major renovations, and equipment. The
expenditure of such funds, whether for operating or cap-
ital expenditures, does not obligate the State health secu-
rity program to provide for continued support for such ex-
penditures unless included in an approved global budget.
SEC. 612. PAYMENTS TO HEALTH CARE PRACTITIONERS
BASED ON PROSPECTIVE FEE SCHEDULE.
(a) FEE FOR SERVICE.—
(1) IN
GENERAL.—Every independent health
care practitioner is entitled to be paid, for the provi-
sion of covered health services under the State
health security program, a fee for each billable cov-
ered service.
(2) GLOBAL FEE PAYMENT METHODOLOGIES.—
The Board shall establish models and encourage
State health security programs to implement alter-
native payment methodologies that incorporate glob-
al fees for related services (such as all outpatient
procedures for treatment of a condition) or for a
basic group of services (such as primary care serv-
ices) furnished to an individual over a period of
time, in order to encourage continuity and efficiency
in the provision of services. Such methodologies shall
be designed to ensure a high quality of care.
111
(3) BILLING
DEADLINES; ELECTRONIC
BILL-
ING.—A State health security program may deny
payment for any service of an independent health
care practitioner for which it did not receive a bill
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
112
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-
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).
113
(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 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.
114
(b) PAYMENT ADJUSTMENT.—Payments under sub-
section (a) may include, consistent with the budgets devel-
oped under this title—
(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
115
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
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.—Based 
upon 
the 
rec-
ommendations of the Advisory Committee on Pre-
116
scription Drugs under section 403, 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
employability 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-
117
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-
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
118
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
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.
119
SEC. 618. PAYMENT INCENTIVES FOR MEDICALLY UNDER-
SERVED AREAS.
(a) MODEL PAYMENT METHODOLOGIES.—In addi-
tion to the payment amounts otherwise provided in this
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 405(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,
120
the benefits covered under the program, or the com-
pliance of the program with the State health security
budget under subtitle A, and
(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
121
Security Act for a violation of section 1842(j)(1) of such
Act. Such sanctions are in addition to any sanctions that
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.
122
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—
(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
123
(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)).
(2) MIDLEVEL
PRIMARY
CARE
PRACTITION-
ERS.—To assure an adequate supply of primary care
practitioners, there shall be a number, specified by
the Board, of midlevel primary care practitioners (as
defined in subsection (e)(2)) employed in the health
care system as of January 1, 2000.
(c) METHOD FOR ATTAINMENT OF NATIONAL GOAL
FOR
GRADUATE
MEDICAL
EDUCATION; 
PROGRAM
GOALS.—
(1) IN GENERAL.—The Board shall establish a
method of applying the national goal in subsection
(b)(1) to program goals for each medical residency
education program or to medical residency education
consortia.
124
(2) 
CONSIDERATION.—The 
program 
goals
under paragraph (1) shall be based on the distribu-
tion of medical schools and other teaching facilities
within each State health security program, and the
number of positions for graduate medical education.
(3) MEDICAL RESIDENCY EDUCATION CONSOR-
TIUM.—In this subsection, the term ‘‘medical resi-
dency education consortium’’ means a consortium of
medical residency education programs in a contig-
uous geographic area (which may be an interstate
area) if the consortium—
(A) includes at least one medical school
with a teaching hospital and related teaching
settings, and
(B) has an affiliation with qualified com-
munity-based primary health service providers
described in section 202(a) and with at least
one comprehensive health service organization
established under section 303.
(4) ENFORCEMENT THROUGH STATE HEALTH
SECURITY
BUDGETS.—The Board shall develop a
formula for reducing payments to State health secu-
rity programs (that provide for payments to a medi-
cal residency education program) that failed to meet
125
the goal for the program established under this sub-
section.
(d) METHOD FOR ATTAINMENT OF NATIONAL GOAL
FOR MIDLEVEL PRIMARY CARE PRACTITIONERS.—To as-
sist in attaining the national goal identified in subsection
(b)(2), the Board shall—
(1) advise the Public Health Service on alloca-
tions of funding under titles VII and VIII of the
Public Health Service Act, the National Health
Service Corps, and other programs in order to in-
crease the supply of midlevel primary care practi-
tioners, and
(2) commission a study of the potential benefits
and disadvantages of expanding the scope of practice
authorized under State laws for any class of midlevel
primary care practitioners.
(e) DEFINITIONS.—In this title:
(1) MEDICAL
RESIDENCY
EDUCATION
PRO-
GRAM.—The term ‘‘medical residency education pro-
gram’’ means a program that provides education
and training to graduates of medical schools in order
to meet requirements for licensing and certification
as a physician, and includes the medical school su-
pervising the program and includes the hospital or
other facility in which the program is operated.
126
(2) 
MIDLEVEL
PRIMARY
CARE
PRACTI-
TIONER.—The term ‘‘midlevel primary care practi-
tioner’’ means a clinical nurse practitioner, certified
nurse midwife, physician assistance, or other non-
physician practitioner, specified by the Board, as
authorized to practice under State law.
(3) PRIMARY CARE RESIDENT.—The term ‘‘pri-
mary care resident’’ means (in accordance with cri-
teria established by the Board) a resident being
trained in a distinct program of family practice med-
icine, general practice, general internal medicine, or
general pediatrics.
SEC. 702. ESTABLISHMENT OF ADVISORY COMMITTEE ON
HEALTH PROFESSIONAL EDUCATION.
(a) IN GENERAL.—The Board shall provide for an
Advisory Committee on Health Professional Education (in
this section referred to as the ‘‘Committee’’) to advise the
Board on its activities under section 701.
(b) MEMBERSHIP.—The Committee shall be com-
posed of—
(1) the Chair of the Board, who shall serve as
Chair of the Committee, and
(2) 12 members, not otherwise in the employ of
the United States, appointed by the Board without
regard to the provisions of title 5, United States
127
Code, governing appointments in the competitive
service.
The appointed members shall provide a balanced point of
view with respect to health professional education, primary
care disciplines, and health care policy and shall include
individuals who are representative of medical schools,
other health professional schools, residency programs, pri-
mary care practitioners, teaching hospitals, professional
associations, public health organizations, State health
security programs, and consumers.
(c) TERMS OF MEMBERS.—Each appointed member
shall hold office for a term of five years, except that—
(1) any member appointed to fill a vacancy oc-
curring during the term for which the member’s
predecessor was appointed shall be appointed for the
remainder of that term; and
(2) the terms of the members first taking office
shall expire, as designated by the Board at the time
of appointment, two at the end of the second year,
two at the end of the third year, two at the end of
the fourth year, and three at the end of the fifth
year after the date of enactment of this Act.
(d) VACANCIES.—
(1) IN GENERAL.—The Board shall fill any va-
cancy in the membership of the Committee in the
128
same manner as the original appointment. The va-
cancy shall not affect the power of the remaining
members to execute the duties of the Committee.
(2) VACANCY
APPOINTMENTS.—Any member
appointed to fill a vacancy shall serve for the re-
mainder of the term for which the predecessor of the
member was appointed.
(3) REAPPOINTMENT.—The Board may re-
appoint an appointed member of the Committee for
a second term in the same manner as the original
appointment.
(e) DUTIES.—It shall be the duty of the Committee
to advise the Board concerning graduate medical edu-
cation policies under this title.
(f) STAFF.—The Committee, its members, and any
committees of the Committee shall be provided with such
secretarial, clerical, or other assistance as may be author-
ized by the Board for carrying out their respective
functions.
(g) MEETINGS.—The Committee shall meet as fre-
quently as the Board deems necessary, but not less than
4 times each year. Upon request by four or more members
it shall be the duty of the Chair to call a meeting of the
Committee.
129
(h) COMPENSATION.—Members of the Committee
shall be reimbursed by the Board for travel and per diem
in lieu of subsistence expenses during the performance of
duties of the Board in accordance with subchapter I of
chapter 57 of title 5, United States Code.
(i) FACA NOT APPLICABLE.—The provisions of the
Federal Advisory Committee Act shall not apply to the
Committee.
SEC. 703. GRANTS FOR HEALTH PROFESSIONS EDUCATION,
NURSE 
EDUCATION, 
AND 
THE 
NATIONAL
HEALTH SERVICE CORPS.
(a) TRANSFERS
TO PUBLIC HEALTH SERVICE.—
From the amounts provided under subsection (c), the
Board shall make transfers from the American Health Se-
curity Trust Fund to the Public Health Service under sub-
part II of part D of title III, title VII, and title VIII of
the Public Health Service Act for the support of the Na-
tional Health Service Corps, health professions education,
and nursing education, including education of clinical
nurse practitioners, certified registered nurse anesthetists,
certified nurse midwives, and physician assistants. Of the
amounts so transferred in each year, not less than 50 per-
cent shall be expended for the support of the National
Health Service Corps.
130
(b) RANGE OF FUNDS.—The amount of transfers
under subsection (a) for any fiscal year shall be an amount
(specified by the Board each year) not less than 4⁄100 per-
cent and not to exceed 6⁄100 percent of the amounts the
Board estimates will be expended from the Trust Fund
in the fiscal year.
(c) FUNDS SUPPLEMENTAL TO OTHER FUNDS.—The
funds provided under this section with respect to provision
of services are in addition to, and not in replacement of,
funds made available under the provisions referred to in
subsection (a) and shall be administered in accordance
with the terms of such provisions. The Board shall make
no transfer of funds under this section for any fiscal year
for which the total appropriations for the programs au-
thorized by such provisions are less than the total amount
appropriated for such programs in fiscal year 1993.
Subtitle B—Direct Health Care
Delivery
SEC. 711. SETASIDE FOR PUBLIC HEALTH BLOCK GRANTS.
(a) TRANSFERS
TO PUBLIC HEALTH SERVICE.—
From the amounts provided under subsection (c), the
Board shall make transfers from the American Health Se-
curity Trust Fund to the Public Health Service for the
following purposes:
131
(1) For payments to States under the maternal
and child health block grants under title V of the
Social Security Act.
(2) Preventive health block grants under part A
of title XIX of the Public Health Service Act.
(3) Grants to States for community mental
health services under subpart I of part B of title
XIX of the Public Health Service Act.
(4) Grants to States for prevention and treat-
ment of substance abuse under subpart II of part B
of title XIX of the Public Health Service Act.
(5) Grants for HIV health care services under
parts A, B, and C of title XXVI of the Public
Health Service Act.
(b) RANGE OF FUNDS.—The amount of transfers
under subsection (a) for any fiscal year shall be an amount
(specified by the Board each year) not less than 1⁄10 per-
cent and not to exceed 14⁄100 percent of the amounts the
Board estimates will be expended from the Trust Fund
in the fiscal year.
(c) FUNDS SUPPLEMENTAL TO OTHER FUNDS.—The
funds provided under this section with respect to provision
of services are in addition to, and not in replacement of,
funds made available under the programs referred to in
subsection (a) and shall be administered in accordance
132
with the terms of such programs. The Board shall make
no transfer of funds under this section for any fiscal year
for which the total appropriations for such programs are
less than the total amount appropriated for such programs
in fiscal year 1993.
SEC. 712. SETASIDE FOR PRIMARY HEALTH CARE DELIV-
ERY.
(a) TRANSFERS
TO PUBLIC HEALTH SERVICE.—
From the amounts provided under subsection (c), the
Board shall make transfers from the American Health Se-
curity Trust Fund to the Public Health Service for the
program of primary care service expansion grants under
subpart V of part D of title III of the Public Health
Service Act (as added by section 713 of this Act).
(b) RANGE OF FUNDS.—The amount of transfers
under subsection (a) for any fiscal year shall be an amount
(specified by the Board each year) not less than 6⁄100 per-
cent and not to exceed 1⁄10 percent of the amounts the
Board estimates will be expended from the Trust Fund
in the fiscal year.
(c) FUNDS SUPPLEMENTAL TO OTHER FUNDS.—The
funds provided under this section with respect to provision
of services are in addition to, and not in replacement of,
funds made available under the sections 329, 330, 340,
340A, 1001, and 2655 of the Public Health Service Act.
133
The Board shall make no transfer of funds under this sec-
tion for any fiscal year for which the total appropriations
for such sections are less than the total amount appro-
priated under such sections in fiscal year 1993.
SEC. 713. PRIMARY CARE SERVICE EXPANSION GRANTS.
Part D of title III of the Public Health Service Act
(42 U.S.C. 254b et seq.) is amended by adding at the end
thereof the following new subpart:
‘‘Subpart V—Primary Care Expansion
‘‘SEC. 340D. EXPANDING PRIMARY CARE DELIVERY CAPAC-
ITY IN URBAN AND RURAL AREAS.
‘‘(a) GRANTS FOR PRIMARY CARE CENTERS.—From
the amounts described in subsection (c), the American
Health Security Standards Board shall make grants to
public and nonprofit private entities for projects to plan
and develop primary care centers which will serve medi-
cally underserved populations (as defined in section
330(b)(3)) in urban and rural areas and to deliver primary
care services to such populations in such areas. The funds
provided under such a grant may be used for the same
purposes for which a grant may be made under subsection
(c) or (d) of section 330.
‘‘(b) PROCESS OF AWARDING GRANTS.—The provi-
sions of subsection (e)(1) of section 330 shall apply to a
grant under this section in the same manner as they apply
134
to a grant under subsection (c) of such section. The provi-
sions of subsection (g)(3) of such section shall apply to
grants for projects to plan and develop primary care cen-
ters under this section in the same manner as they apply
to grants under such section.
‘‘(c) FUNDING AS SET-ASIDE FROM TRUST FUND.—
Funding to carry out this section is provided from the
American Health Security Trust Fund in accordance with
section 912 of the American Health Security Act.
‘‘(d) PRIMARY CARE CENTER DEFINED.—In this sec-
tion, the term ‘primary care center’ means—
‘‘(1) a migrant health center (as defined in sec-
tion 329(a)(1)),
‘‘(2) a community health center (as defined in
section 330(a)),
‘‘(3) an entity qualified to receive a grant under
section 340, 340A, 1001, or 2655, or
‘‘(4) a Federally-qualified health center (as de-
fined in section 1905(l)(2)(B) of the Social Security
Act).’’.
Subtitle C—Primary Care and
Outcomes Research
SEC. 721. SET-ASIDE FOR OUTCOMES RESEARCH.
(a) GRANTS FOR OUTCOMES RESEARCH.—From the
amounts provided under subsection (c), the Board shall
135
make transfers from the Trust Fund to the Agency for
Health Care Policy and Research under title IX of the
Public Health Service Act for the purpose of carrying out
activities under such title.
(b) RANGE OF FUNDS.—The amount of transfers
under subsection (a) for any fiscal year shall be an amount
(specified by the Board each year) not less than 1⁄100 per-
cent and not to exceed 2⁄100 percent of the amounts the
Board estimates will be expended from the Trust Fund
in the fiscal year.
(c) FUNDS SUPPLEMENTAL TO OTHER FUNDS.—The
funds provided under this section with respect to provision
of services are in addition to, and not in replacement of,
funds made available to the Agency for Health Care Policy
and Research under section 926 of the Public Health
Service Act. The Board shall make no transfer of funds
under this section for any fiscal year for which the total
appropriations under such section are less than the total
amount appropriated under such section and title in fiscal
year 1993.
(d) CONFORMING AMENDMENT.—Section 926(a) of
the Public Health Service Act (42 U.S.C. 299c–5(a)) is
amended by striking ‘‘$35,000,000’’ and all that follows
through the end and inserting ‘‘for each fiscal year (begin-
136
ning with fiscal year 1994) such sums as may be
necessary.’’.
SEC. 722. OFFICE OF PRIMARY CARE AND PREVENTION RE-
SEARCH.
(a) IN GENERAL.—Title IV of the Public Health
Service Act, as amended by section 2 of Public Law 101–
613, is amended—
(1) by redesignating section 486 as section
485A;
(2) by redesignating parts F through H as
parts G through I, respectively; and
(3) by inserting after part E the following new
part:
‘‘PART F—RESEARCH ON PRIMARY CARE AND
PREVENTION
‘‘SEC. 486. OFFICE OF PRIMARY CARE AND PREVENTION
RESEARCH.
‘‘(a) ESTABLISHMENT.—There is established within
the Office of the Director of NIH an office to be known
as the Office of Primary Care and Prevention Research
(in this part referred to as the ‘Office’). The Office shall
be headed by a director, who shall be appointed by the
Director of NIH.
‘‘(b) PURPOSE.—The Director of the Office shall—
137
‘‘(1) identify projects of research on primary
care and prevention that should be conducted or
supported by the national research institutes, with
particular emphasis on—
‘‘(A) clinical patient care,
‘‘(B) diagnostic effectiveness,
‘‘(C) primary care education,
‘‘(D) health and family planning services,
‘‘(E) medical effectiveness outcomes of pri-
mary care procedures and interventions,
‘‘(F) the use of multidisciplinary teams of
health care practitioners.
‘‘(2) identify multidisciplinary research related
to primary care and prevention that should be so
conducted;
‘‘(3) promote coordination and collaboration
among entities conducting research identified under
any of paragraphs (1) and (2);
‘‘(4) encourage the conduct of such research by
entities receiving funds from the national research
institutes;
‘‘(5) recommend an agenda for conducting and
supporting such research;
138
‘‘(6) promote the sufficient allocation of the re-
sources of the national research institutes for con-
ducting and supporting such research; and
‘‘(7) prepare the report required in section
486B.
‘‘(c) PRIMARY CARE AND PREVENTION RESEARCH
DEFINED.—For purposes of this part, the term ‘primary
care and prevention research’ means research on improve-
ment of the practice of family medicine, general internal
medicine, and general pediatrics, and includes research
relating to—
‘‘(1) obstetrics and gynecology, dentistry, or
mental health or substance abuse treatment when
provided by a primary care physician or other
primary care practitioner, and
‘‘(2) primary care provided by multidisciplinary
teams.
‘‘SEC. 486A. NATIONAL DATA SYSTEM AND CLEARINGHOUSE
ON PRIMARY CARE AND PREVENTION RE-
SEARCH.
‘‘(a) DATA SYSTEM.—The Director of NIH, in con-
sultation with the Director of the Office, shall establish
a data system for the collection, storage, analysis, re-
trieval, and dissemination of information regarding pri-
mary care and prevention research that is conducted or
139
supported by the national research institutes. Information
from the data system shall be available through informa-
tion systems available to health care professionals and pro-
viders, researchers, and members of the public.
‘‘(b) CLEARINGHOUSE.—The Director of NIH, in
consultation with the Director of the Office and with the
National Library of Medicine, shall establish, maintain,
and operate a program to provide, and encourage the use
of, information on research and prevention activities of the
national research institutes that relate to primary care
and prevention research.
‘‘SEC. 486B. BIENNIAL REPORT.
‘‘(a) IN GENERAL.—With respect to primary care
and prevention research, the Director of the Office shall,
not later than one year after the date of the enactment
of this part, and biennially thereafter, prepare a report—
‘‘(1) describing and evaluating the progress
made during the preceding two fiscal years in re-
search and treatment conducted or supported by the
National Institutes of Health;
‘‘(2) summarizing and analyzing expenditures
made by the agencies of such Institutes (and by
such Office) during the preceding two fiscal years;
and
140
‘‘(3) making such recommendations for legisla-
tive and administrative initiatives as the Director of
the Office determines to be appropriate.
‘‘(b) INCLUSION IN BIENNIAL REPORT OF DIRECTOR
OF NIH.—The Director of the Office shall submit each
report prepared under subsection (a) to the Director of
NIH for inclusion in the report submitted to the President
and the Congress under section 403.’’.
(b) REQUIREMENT OF SUFFICIENT ALLOCATION OF
RESOURCES OF INSTITUTES.—Section 402(b) of the Pub-
lic Health Service Act (42 U.S.C. 282(b)) is amended—
(1) in paragraph (10), by striking ‘‘and’’ after
the semicolon at the end;
(2) in paragraph (11), by striking the period at
the end and inserting ‘‘; and’’; and
(3) by inserting after paragraph (11) the fol-
lowing new paragraph:
‘‘(12) after consultation with the Director of
the Office of Primary Care and Prevention Re-
search, shall ensure that resources of the National
Institutes of Health are sufficiently allocated for
projects on primary care and prevention research
that are identified under section 486(b).’’.
(c) AUTHORIZATION OF APPROPRIATIONS.—Section
408 of the Public Health Service Act (42 U.S.C. 284(a))
141
is amended by adding at the end the following new
paragraph:
‘‘(3) For the Office of Primary Care and Pre-
vention Research, there are authorized to be appro-
priated 
$150,000,000 
for 
fiscal 
year 
1994,
$180,000,000 
for 
fiscal 
year 
1995, 
and
$216,000,000 for fiscal year 1996.’’.
(d) CONFORMING AMENDMENT.—Section 485(g) of
the Public Health Service Act (42 U.S.C. 287c–2(g)) is
amended by striking ‘‘section 486’’ and inserting ‘‘section
485A’’.
Subtitle D—School-Related Health
Services
SEC. 731. AUTHORIZATIONS OF APPROPRIATIONS.
(a) FUNDING FOR SCHOOL-RELATED HEALTH SERV-
ICES.—For the purpose of carrying out this subtitle, there
are authorized to be appropriated $100,000,000 for fiscal
year 
1997, 
$275,000,000 
for 
fiscal 
year 
1998,
$350,000,000 for fiscal year 1999, and $400,000,000 for
each of the fiscal years 2000 and 2001.
(b) RELATION TO OTHER FUNDS.—The authoriza-
tions of appropriations established in subsection (a) are
in addition to any other authorizations of appropriations
that are available for the purpose described in such sub-
section.
142
SEC. 732. ELIGIBILITY FOR DEVELOPMENT AND OPER-
ATION GRANTS.
(a) IN GENERAL.—Entities eligible to apply for and
receive grants under section 734 or 735 are the following:
(1) State health agencies that apply on behalf
of local community partnerships and other commu-
nities in need of health services for school-aged chil-
dren within the State.
(2) Local community partnerships in States in
which health agencies have not applied.
(b) LOCAL COMMUNITY PARTNERSHIPS.—
(1) IN GENERAL.—A local community partner-
ship under subsection (a)(2) is an entity that, at a
minimum, includes—
(A) a local health care provider with expe-
rience in delivering services to school-aged chil-
dren;
(B) one or more local public schools; and
(C) at least one community based organi-
zation located in the community to be served
that has a history of providing services to
school-aged children in the community who are
at-risk.
(2) PARTICIPATION.—A partnership described
in paragraph (1) shall, to the maximum extent fea-
sible, involve broad based community participation
143
from parents and adolescent children to be served,
health and social service providers, teachers and
other public school and school board personnel, de-
velopment and service organizations for adolescent
children, and interested business leaders. Such par-
ticipation may be evidenced through an expanded
partnership, or an advisory board to such partner-
ship.
(c) DEFINITIONS REGARDING CHILDREN.—For pur-
poses of this subtitle:
(1) The term ‘‘adolescent children’’ means
school-aged children who are adolescents.
(2) The term ‘‘school-aged children’’ means in-
dividuals who are between the ages of 4 and 19 (in-
clusive).
SEC. 733. PREFERENCES.
(a) IN GENERAL.—In making grants under sections
734 and 735, the Secretary shall give preference to appli-
cants whose communities to be served show the most sub-
stantial level of need for such services among school-aged
children, as measured by indicators of community health
including the following:
(1) High levels of poverty.
(2) The presence of a medically underserved
population.
144
(3) The presence of a health professional short-
age area.
(4) High rates of indicators of health risk
among school-aged children, including a high propor-
tion of such children receiving services through the
Individuals with Disabilities Education Act, adoles-
cent pregnancy, sexually transmitted disease (includ-
ing infection with the human immunodeficiency
virus), preventable disease, communicable disease,
intentional and unintentional injuries, community
and gang violence, unemployment among adolescent
children, juvenile justice involvement, and high rates
of drug and alcohol exposure.
(b) LINKAGE TO COMMUNITY HEALTH CENTERS.—
In making grants under sections 734 and 735, the Sec-
retary shall give preference to applicants that demonstrate
a linkage to community health centers.
SEC. 734. GRANTS FOR DEVELOPMENT OF PROJECTS.
(a) IN GENERAL.—The Secretary may make grants
to State health agencies or to local community partner-
ships to develop school health service sites.
(b) USE OF FUNDS.—A project for which a grant
may be made under subsection (a) may include but not
be limited to the cost of the following:
145
(1) Planning for the provision of school health
services.
(2) Recruitment, compensation, and training of
health and administrative staff.
(3) The development of agreements, and the ac-
quisition and development of equipment and infor-
mation services, necessary to support information
exchange between school health service sites and
health plans, health providers, and other entities au-
thorized to collect information under this Act.
(4) Other activities necessary to assume oper-
ational status.
(c) APPLICATION FOR GRANT.—
(1) IN GENERAL.—Applicants shall submit ap-
plications in a form and manner prescribed by the
Secretary.
(2) APPLICATIONS BY STATE HEALTH AGEN-
CIES.—
(A) In the case of applicants that are State
health agencies, the application shall contain
assurances that the State health agency is ap-
plying for funds—
(i) on behalf of at least one local com-
munity partnership; and
146
(ii) on behalf of at least one other
community identified by the State as in
need of the services funded under this sub-
title but without a local community part-
nership.
(B) In the case of the communities identi-
fied in applications submitted by State health
agencies that do not yet have local community
partnerships (including the community identi-
fied under subparagraph (A)(ii)), the State
shall describe the steps that will be taken to aid
the communities in developing a local commu-
nity partnership.
(C) A State applying on behalf of local
community partnerships and other communities
may retain not more than 10 percent of grants
awarded under this subtitle for administrative
costs.
(d) CONTENTS OF APPLICATION.—In order to receive
a grant under this section, an applicant must include in
the application the following information:
(1) An assessment of the need for school health
services in the communities to be served, using the
latest available health data and health goals and ob-
jectives established by the Secretary.
147
(2) A description of how the applicant will de-
sign the proposed school health services to reach the
maximum number of school-aged children who are at
risk.
(3) An explanation of how the applicant will in-
tegrate its services with those of other health and
social service programs within the community.
(4) A description of a quality assurance pro-
gram which complies with standards that the Sec-
retary may prescribe.
(e) NUMBER OF GRANTS.—Not more than one plan-
ning grant may be made to a single applicant. A planning
grant may not exceed two years in duration.
SEC. 735. GRANTS FOR OPERATION OF PROJECTS.
(a) IN GENERAL.—The Secretary may make grants
to State health agencies or to local community partner-
ships for the cost of operating school health service sites.
(b) USE OF GRANT.—The costs for which a grant
may be made under this section include but are not limited
to the following:
(1) The cost of furnishing health services that
are not otherwise covered under this Act or by any
other public or private insurer.
(2) The cost of furnishing services whose pur-
pose is to increase the capacity of individuals to uti-
148
lize available health services, including transpor-
tation, community and patient outreach, patient
education, translation services, and such other serv-
ices as the Secretary determines to be appropriate in
carrying out such purpose.
(3) Training, recruitment and compensation of
health professionals and other staff.
(4) Outreach services to school-aged children
who are at-risk and to the parents of such children.
(5) Linkage of individuals to health plans, com-
munity health services and social services.
(6) Other activities deemed necessary by the
Secretary.
(c) APPLICATION FOR GRANT.—Applicants shall sub-
mit applications in a form and manner prescribed by the
Secretary. In order to receive a grant under this section,
an applicant must include in the application the following
information:
(1) A description of the services to be furnished
by the applicant.
(2) The amounts and sources of funding that
the applicant will expend, including estimates of the
amount of payments the applicant will receive from
sources other than the grant.
149
(3) Such other information as the Secretary de-
termines to be appropriate.
(d) ADDITIONAL CONTENTS OF APPLICATION.—In
order to receive a grant under this section, an applicant
must meet the following conditions:
(1) The applicant furnishes the following serv-
ices:
(A) Diagnosis and treatment of simple ill-
nesses and minor injuries.
(B) Preventive health services, including
health screenings.
(C) Services provided for the purpose de-
scribed in subsection (b)(2).
(D) Referrals and followups in situations
involving illness or injury.
(E) Health and social services, counseling
services, and necessary referrals, including re-
ferrals regarding mental health and substance
abuse.
(F) Such other services as the Secretary
determines to be appropriate.
(2) The applicant is a participating provider in
the State’s program for medical assistance under
title XIX of the Social Security Act.
150
(3) The applicant does not impose charges on
students or their families for services (including col-
lection of any cost-sharing for services under the
comprehensive benefit package that otherwise would
be required).
(4) The applicant has reviewed and will periodi-
cally review the needs of the population served by
the applicant in order to ensure that its services are
accessible to the maximum number of school-aged
children in the area, and that, to the maximum ex-
tent possible, barriers to access to services of the ap-
plicant are removed (including barriers resulting
from the area’s physical characteristics, its eco-
nomic, social and cultural grouping, the health care
utilization patterns of such children, and available
transportation).
(5) In the case of an applicant which serves a
population that includes a substantial proportion of
individuals of limited English speaking ability, the
applicant has developed a plan to meet the needs of
such population to the extent practicable in the lan-
guage and cultural context most appropriate to such
individuals.
151
(6) The applicant will provide non-Federal con-
tributions toward the cost of the project in an
amount determined by the Secretary.
(7) The applicant will operate a quality assur-
ance program consistent with section 734(d).
(e) DURATION OF GRANT.—A grant under this sec-
tion shall be for a period determined by the Secretary.
(f) REPORTS.—A recipient of funding under this sec-
tion shall provide such reports and information as are re-
quired in regulations of the Secretary.
SEC. 736. FEDERAL ADMINISTRATIVE COSTS.
Of the amounts made available under section 731, the
Secretary may reserve not more than 5 percent for admin-
istrative expenses regarding this subtitle.
SEC. 737. DEFINITIONS.
For purposes of this subtitle:
(1) The term ‘‘adolescent children’’ has the
meaning given such term in section 732(c).
(2) The term ‘‘at risk’’ means at-risk with re-
spect to health.
(3) The term ‘‘community health center’’ has
the meaning given such term in section 330 of the
Public Health Service Act.
(4) The term ‘‘health professional shortage
area’’ means a health professional shortage area des-
152
ignated under section 332 of the Public Health Serv-
ice Act.
(5) The term ‘‘medically underserved popu-
lation’’ has the meaning given such term in section
330 of the Public Health Service Act.
(6) The term ‘‘school-aged children’’ has the
meaning given such term in section 732(c).
TITLE VIII—FINANCING PROVI-
SIONS; 
AMERICAN 
HEALTH
SECURITY TRUST FUND
SEC. 800. AMENDMENT OF 1986 CODE; SECTION 15 NOT TO
APPLY.
(a) AMENDMENT OF 1986 CODE.—Except as other-
wise expressly provided, whenever in this title an amend-
ment or repeal is expressed in terms of an amendment
to, or repeal of, a section or other provision, the reference
shall be considered to be made to a section or other provi-
sion of the Internal Revenue Code of 1986.
(b) SECTION 15 NOT TO APPLY.—The amendments
made by subtitle B shall not be treated as a change in
a rate of tax for purposes of section 15 of the Internal
Revenue Code of 1986.
153
Subtitle A—American Health
Security Trust Fund
SEC. 801. AMERICAN HEALTH SECURITY TRUST FUND.
(a) IN GENERAL.—There is hereby created on the
books of the Treasury of the United States a trust fund
to be known as the American Health Security Trust Fund
(in this section referred to as the ‘‘Trust Fund’’). The
Trust Fund shall consist of such gifts and bequests as
may be made and such amounts as may be deposited in,
or appropriated to, such Trust Fund as provided in this
Act.
(b) APPROPRIATIONS INTO TRUST FUND.—
(1) TAXES.—There are hereby appropriated to
the Trust Fund for each fiscal year (beginning with
fiscal year 1995), out of any moneys in the Treasury
not otherwise appropriated, amounts equivalent to
100 percent of the aggregate increase in tax liabil-
ities under the Internal Revenue Code of 1986 which
is attributable to the application of the amendments
made by this title. The amounts appropriated by the
preceding sentence shall be transferred from time to
time (but not less frequently than monthly) from the
general fund in the Treasury to the Trust Fund,
such amounts to be determined on the basis of esti-
mates by the Secretary of the Treasury of the taxes
154
paid to or deposited into the Treasury; and proper
adjustments shall be made in amounts subsequently
transferred to the extent prior estimates were in ex-
cess of or were less than the amounts that should
have been so transferred.
(2) CURRENT
PROGRAM
RECEIPTS.—Notwith-
standing any other provision of law, there are hereby
appropriated to the Trust Fund for each fiscal year
(beginning with fiscal year 1995) the amounts that
would otherwise have been appropriated to carry out
the following programs:
(A) The medicare program, under parts A
and B of title XVIII of the Social Security Act
(other than amounts attributable to any pre-
miums under such parts).
(B) The medicaid program, under State
plans approved under title XIX of such Act.
(C) The Federal employees health benefit
program, under chapter 89 of title 5, United
States Code.
(D) The CHAMPUS program, under chap-
ter 55 of title 10, United States Code.
(E) The maternal and child health pro-
gram (under title V of the Social Security Act),
vocational rehabilitation programs, programs
155
for drug abuse and mental health services
under the Public Health Service Act, programs
providing general hospital or medical assistance,
and any other Federal program identified by
the Board, in consultation with the Secretary of
the Treasury, to the extent the programs pro-
vide for payment for health services the pay-
ment of which may be made under this Act.
(c) INCORPORATION OF PROVISIONS.—The provisions
of subsections (b) through (i) of section 1817 of the Social
Security Act shall apply to the Trust Fund under this Act
in the same manner as they applied to the Federal Hos-
pital Insurance Trust Fund under part A of title XVIII
of such Act, except that the American Health Security
Standards Board shall constitute the Board of Trustees
of the Trust Fund.
(d) TRANSFER OF FUNDS.—Any amounts remaining
in the Federal Hospital Insurance Trust Fund or the Fed-
eral Supplementary Medical Insurance Trust Fund after
the settlement of claims for payments under title XVIII
have been completed, shall be transferred into the Amer-
ican Health Security Trust Fund.