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section 1124 (42 U.S.C. 1320a–3) of the Social
Security Act;
(B) Such entity may not—
(i) directly or indirectly (as deter-
mined by the regulations promulgated
under section 1124(a)(3) of the Social Se-
curity Act) possess an ownership interest
of one (1) percent or more in a health care
facility, a health plan, or association of
such;
(ii) own a whole or part interest in
any mortgage, deed of trust, note, or other
obligation secured (in whole or in part) by
a health care facility, health plan, associa-
tion of such, or any of the property or as-
sets thereof, which whole or part interest is
equal to or exceeds (1) percent of the total
property and assets of the facility, plan, or
association; or
(iii) utilize officers or members of the
governing body more than 10 percent of
whom are the officers or members of the
governing board of one or more health fa-
cilities, plans, or associations).
(c) GRANTS TO ENTITIES.—
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(1) IN GENERAL.—The Secretary shall select,
through a competitive grantmaking process, no more
than one entity to serve as a health quality improve-
ment foundation in each State, and may designate
one entity to serve multiple contiguous States.
(2) PREFERENCES.—In making its designation,
the Secretary shall give preference to an entity—
(A) which can demonstrate the capacity to
fulfill the duties described under subsection (d)
for enrollees of health plans certified under sec-
tion 301, as well as enrollees of title XVIII of
the Social Security Act; and
(B) for which the primary place of busi-
ness is located in the State within which the
functions of the foundation will be conducted,
or, if one entity is to be designated to serve
multiple States, preference shall be given to an
entity for which the primary place of business
is located in one of the States.
(3) SCOPE OF WORK.—Each grant with an en-
tity under this section shall be pursuant to an agree-
ment providing—
(A) the entity shall perform the duties de-
scribed in subsection (d) for the benefit of—
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(i) enrollees in health plans certified
under section 301,
(ii) individuals enrolled under title
XVIII of the Social Security Act, and
(iii) recipients entitled to benefits
under title XIX of the Social Security Act.
(B) the Secretary shall evaluate the per-
formance of the entity in carrying out the func-
tions specified in the grant;
(C) the grant shall be for a term of four
years and shall be renewable, based upon evi-
dence of successful quality improvement per-
formance, without reopening the competitive se-
lection process, except that an entity subject to
subsection (e)(3) shall have term(s) limited to
two years and shall be subject to competition at
the end of each contract period;
(D) if the Secretary decides not to renew
a grant with a foundation, the foundation shall
be notified of the decision at least one hundred
and eighty days prior to the expiration of the
grant term, and shall be afforded an oppor-
tunity to present information for the purposes
of appeal of the decision not to renew the grant;
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(E) based on a finding by the Secretary
that the foundation has not met or no longer
meets the requirements of this section, the Sec-
retary may terminate the grant prior to its ex-
piration upon one hundred and eighty days no-
tice, during which notice period the Secretary
shall provide the foundation an opportunity to
seek an nonbinding opinion on the Secretary’s
finding before a panel of representatives of
foundations convened by the Secretary;
(F) the entity may terminate the grant
upon one hundred and eighty days notice to the
Secretary; and
(G) the amount of the grant to be allo-
cated under a grant shall consist of a sum nec-
essary to perform the duties under paragraph
(d), which may be augmented with additional
funds for the performance of research by a
foundation selected by the Secretary for exem-
plary performance and the merit of research
proposals submitted.
(d) DUTIES.—A health quality improvement founda-
tion shall carry out the following duties in the State in
which the foundation operates:
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(1) 
QUALITY
IMPROVEMENT.—Collaboration
with physicians and other health care professionals
in ongoing efforts to improve the quality of health
care provided to individuals in the State, giving pri-
ority to health conditions and interventions which
are likely to produce the greatest impact in prevent-
ing or reducing morbidity, mortality, and functional
impairment.
(2) OVERSIGHT.—Analyze data obtained under
section 205 and other information obtained by the
foundation pertaining to health care delivered in the
State, for the purpose of—
(A) identifying opportunities for quality
improvement;
(B) documenting that such improvement is
being realized; and
(C) auditing samples of such information
and its source documents to assure the informa-
tion is valid, reliable, and comparable between
plans, and to inform recommendations for im-
proving the validity, reliability, and comparabil-
ity of the information.
(3) TECHNICAL
ASSISTANCE.—Provide tech-
nical assistance to health plans and providers, in-
cluding—
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(A) feedback to providers of information
on patterns of health care delivery, health sta-
tus, and outcomes;
(B) assistance in fulfilling the data report-
ing requirement of section 205;
(C) assistance in the development of pa-
tient education systems that enhance patient in-
volvement in decisions relating to their health
care;
(D) entering into agreements with selected
health plans to provide educational programs
for health care professionals.
(4) ANNUAL REPORT.—Submit to the Secretary
and make publicly available an annual report con-
cerning—
(A) recommendations for improving the
utility of clinical practice guidelines as a means
of identifying opportunities for improvement
and bringing about quality improvement;
(B) recommendations for improving the re-
liability and validity of the national measures of
quality performance and consumer survey data
described in section 205;
(C) selected measures of the health care
status of the population of the State, including