I
104TH CONGRESS
1ST SESSION
H. R. 1200
To provide for health care for every American and to control the cost and
enhance the quality of the health care system.
IN THE HOUSE OF REPRESENTATIVES
MARCH 9, 1995
Mr. MCDERMOTT (for himself, Mr. WAXMAN, Mr. CONYERS, Mr. ABERCROM-
BIE, Mr. PAYNE of New Jersey, Ms. VELA´ZQUEZ, Mr. OBERSTAR, Mr.
STARK, Mr. SCOTT, Mr. VENTO, Mr. GONZALEZ, Mr. YATES, Mr. DEL-
LUMS, Mr. BECERRA, Ms. WOOLSEY, Mr. SANDERS, Mr. MARTINEZ, Mr.
DIXON, Mr. OLVER, Mrs. COLLINS of Illinois, Mr. GIBBONS, Mr. WATT
of North Carolina, Mr. GUTIERREZ, Mr. HINCHEY, Mr. EVANS, Mr.
ENGEL, Mr. FRANK of Massachusetts, Ms. PELOSI, Ms. EDDIE BERNICE
JOHNSON of Texas, Mr. MILLER of California, Mr. COYNE, Mr. SABO,
Mr. CLAY, Mr. BERMAN, Mrs. MEEK of Florida, Mr. TORRES, Mr.
OWENS, Mr. SCHUMER, Mr. STOKES, Mr. ROMERO-BARCELO´, Mr. LEWIS
of Georgia, Mr. STUDDS, Mr. TOWNS, Mr. NADLER, Ms. NORTON, Mr.
FATTAH, Mr. SERRANO, Mr. FORD, Mr. RANGEL, Mrs. MINK of Hawaii,
Mr. FRAZER, Ms. RIVERS, Mr. FLAKE, Mr. MOAKLEY, Mr. KENNEDY of
Massachusetts, and Ms. WATERS) introduced the following bill; which was
referred to the Committee on Commerce, and in addition to the Commit-
tees on Ways and Means, Government Reform and Oversight, National
Security, and Veterans’ Affairs, for a period to be subsequently deter-
mined by the Speaker, in each case for consideration of such provisions
as fall within the jurisdiction of the committee concerned
A BILL
To provide for health care for every American and to control
the cost and enhance the quality of the health care system.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE; TABLE OF CONTENTS.
(a) SHORT TITLE.—This Act may be cited as the
‘‘American Health Security Act of 1995’’.
(b) TABLE OF CONTENTS.—The table of contents of
this Act is as follows:
Sec. 1. Short title; table of contents.
TITLE 
I—ESTABLISHMENT 
OF 
A 
STATE-BASED 
AMERICAN
HEALTH SECURITY PROGRAM; UNIVERSAL ENTITLEMENT; EN-
ROLLMENT
Sec. 101. Establishment of a State-based American Health Security Program.
Sec. 102. Universal entitlement.
Sec. 103. Enrollment.
Sec. 104. Portability of benefits.
Sec. 105. Effective date of benefits.
Sec. 106. Relationship to existing Federal health programs.
TITLE II—COMPREHENSIVE BENEFITS, INCLUDING PREVENTIVE
BENEFITS AND BENEFITS FOR LONG TERM CARE
Sec. 201. Comprehensive benefits.
Sec. 202. Definitions relating to services.
Sec. 203. Special rules for home and community-based long-term care services.
Sec. 204. Exclusions and limitations.
Sec. 205. Certification; quality review; plans of care.
TITLE III—PROVIDER PARTICIPATION
Sec. 301. Provider participation and standards.
Sec. 302. Qualifications for providers.
Sec. 303. Qualifications for comprehensive health service organizations.
Sec. 304. Limitation on certain physician referrals.
TITLE IV—ADMINISTRATION
Subtitle A—General Administrative Provisions
Sec. 401. American Health Security Standards Board.
Sec. 402. American Health Security Advisory Council.
Sec. 403. Consultation with private entities.
Sec. 404. State health security programs.
Sec. 405. Complementary conduct of related health programs.
Subtitle B—Control Over Fraud and Abuse
Sec. 411. Application of Federal sanctions to all fraud and abuse under Amer-
ican Health Security Program.
Sec. 412. National health care fraud data base.
Sec. 413. Requirements for operation of State health care fraud and abuse con-
trol units.
Sec. 414. Assignment of unique provider and patient identifiers.
TITLE V—QUALITY ASSESSMENT
Sec. 501. American Health Security Quality Council.
Sec. 502. Development of certain methodologies, guidelines, and standards.
Sec. 503. State quality review programs.
Sec. 504. Elimination of existing utilization review programs; transition.
Sec. 505. Uniform electronic data bases.
TITLE VI—NATIONAL HEALTH SECURITY BUDGET; PAYMENTS;
COST CONTAINMENT MEASURES
Subtitle A—Budgeting and Payments to States
Sec. 601. National health security budget.
Sec. 602. Computation of individual and State capitation amounts.
Sec. 603. State health security budgets.
Sec. 604. Federal payments to States.
Sec. 605. Account for health professional education expenditures.
Subtitle B—Payments by States to Providers
Sec. 611. Payments to hospitals and other facility-based services for operating
expenses on the basis of approved global budgets.
Sec. 612. Payments to health care practitioners based on prospective fee
schedule.
Sec. 613. Payments to comprehensive health service organizations.
Sec. 614. Payments for community-based primary health services.
Sec. 615. Payments for prescription drugs.
Sec. 616. Approved devices and equipment.
Sec. 617. Payments for other items and services.
Sec. 618. Payment incentives for medically underserved areas.
Sec. 619. Authority for alternative payment methodologies.
Subtitle C—Mandatory Assignment and Administrative Provisions
Sec. 621. Mandatory assignment.
Sec. 622. Procedures for reimbursement; appeals.
TITLE VII—PROMOTION OF PRIMARY HEALTH CARE; DEVELOP-
MENT OF HEALTH SERVICE CAPACITY; PROGRAMS TO ASSIST
THE MEDICALLY UNDERSERVED
Subtitle A—Promotion and Expansion of Primary Care Professional Training
Sec. 701. Role of Board; establishment of primary care professional output
goals.
Sec. 702. Establishment of Advisory Committee on Health Professional Edu-
cation.
Sec. 703. Grants for health professions education, nurse education, and the Na-
tional Health Service Corps.
Subtitle B—Direct Health Care Delivery
Sec. 711. Setaside for public health block grants.
Sec. 712. Setaside for primary health care delivery.
Sec. 713. Primary care service expansion grants.
Subtitle C—Primary Care and Outcomes Research
Sec. 721. Set-aside for outcomes research.
Sec. 722. Office of Primary Care and Prevention Research.
Subtitle D—School-Related Health Services
Sec. 731. Authorizations of appropriations.
Sec. 732. Eligibility for development and operation grants.
Sec. 733. Preferences.
Sec. 734. Grants for development of projects.
Sec. 735. Grants for operation of projects.
Sec. 736. Federal administrative costs.
Sec. 737. Definitions.
TITLE VIII—FINANCING PROVISIONS; AMERICAN HEALTH
SECURITY TRUST FUND
Sec. 800. Amendment of 1986 code; section 15 not to apply.
Subtitle A—American Health Security Trust Fund
Sec. 801. American Health Security Trust Fund.
Subtitle B—Taxes Based on Income and Wages
Sec. 811. Payroll tax on employers.
Sec. 812. Health care income tax.
Subtitle C—Increase in Excise Taxes on Tobacco Products
Sec. 821. Increase in excise taxes on tobacco products.
TITLE IX—CONFORMING AMENDMENTS TO THE EMPLOYEE
RETIREMENT INCOME SECURITY ACT OF 1974
Sec. 901. ERISA inapplicable to health coverage arrangements under State
health security programs.
Sec. 902. Exemption of State health security programs from ERISA preemp-
tion.
Sec. 903. Prohibition of employee benefits duplicative of benefits under State
health security programs; coordination in case of workers’ com-
pensation.
Sec. 904. Repeal of continuation coverage requirements under ERISA and cer-
tain other requirements relating to group health plans.
Sec. 905. Effective date of title.
TITLE I—ESTABLISHMENT OF A
STATE-BASED 
AMERICAN
HEALTH 
SECURITY 
PRO-
GRAM; UNIVERSAL ENTITLE-
MENT; ENROLLMENT
SEC. 101. ESTABLISHMENT OF A STATE-BASED AMERICAN
HEALTH SECURITY PROGRAM.
(a) IN GENERAL.—There is hereby established in the
United States a State-Based American Health Security
Program to be administered by the individual States in
accordance with Federal standards specified in, or estab-
lished under, this Act.
(b) STATE HEALTH SECURITY PROGRAMS.—In order
for a State to be eligible to receive payment under section
604, a State must establish a State health security pro-
gram in accordance with this Act.
(c) STATE DEFINED.—
(1) IN GENERAL.—In this Act, subject to para-
graph (2), the term ‘‘State’’ means each of the fifty
States and the District of Columbia.
(2) ELECTION.—If the Governor of Puerto
Rico, the Virgin Islands, Guam, American Samoa, or
the Northern Mariana Islands certifies to the Presi-
dent that the legislature of the Commonwealth or
territory has enacted legislation desiring that the
Commonwealth or territory be included as a State
under the provisions of this Act, such Common-
wealth or territory shall be included as a ‘‘State’’
under this Act beginning January 1 of the first year
beginning ninety days after the President receives
the notification.
SEC. 102. UNIVERSAL ENTITLEMENT.
(a) IN GENERAL.—Every individual who is a resident
of the United States and is a citizen or national of the
United States or lawful resident alien (as defined in sub-
section (d) is entitled to benefits for health care services
under this Act under the appropriate State health security
program. In this section, the term ‘‘appropriate State
health security program’’ means, with respect to an indi-
vidual, the State health security program for the State in
which the individual maintains a primary residence.
(b) TREATMENT OF CERTAIN NONIMMIGRANTS.—
(1) IN GENERAL.—The American Health Secu-
rity Standards Board (in this Act referred to as the
‘‘Board’’) may make eligible for benefits for health
care services under the appropriate State health se-
curity program under this Act such classes of aliens
admitted to the United States as nonimmigrants as
the Board may provide.
(2) CONSIDERATION.—In providing for eligi-
bility under paragraph (1), the Board shall consider
reciprocity in health care services offered to United
States citizens who are nonimmigrants in other for-
eign states, and such other factors as the Board
determines to be appropriate.
(c) TREATMENT OF OTHER INDIVIDUALS.—
(1) BY BOARD.—The Board also may make eli-
gible for benefits for health care services under the
appropriate State health security program under this
Act other individuals not described in subsection (a)
or (b), and regulate the nature of the eligibility of
such individuals, in order—
(A) to preserve the public health of
communities,
(B) to compensate States for the addi-
tional health care financing burdens created by
such individuals, and
(C) to prevent adverse financial and medi-
cal consequences of uncompensated care,
while inhibiting travel and immigration to the
United States for the sole purpose of obtaining
health care services.
SEC. 104. PORTABILITY OF BENEFITS.
(a) IN GENERAL.—To ensure continuous access to
benefits for health care services covered under this Act,
each State health security program—
(1) shall not impose any minimum period of
residence in the State, or waiting period, in excess
of three months before residents of the State are
entitled to, or eligible for, such benefits under the
program;
(2) shall provide continuation of payment for
covered health care services to individuals who have
terminated their residence in the State and estab-
lished their residence in another State, for the dura-
tion of any waiting period imposed in the State of
new residency for establishing entitlement to, or
eligibility for, such services; and
(3) shall provide for the payment for health
care services covered under this Act provided to indi-
viduals while temporarily absent from the State
based on the following principles:
(A) Payment for such health care services
is at the rate that is approved by the State
health security program in the State in which
the services are provided, unless the States con-
cerned agree to apportion the cost between
them in a different manner.
(B) Payment for such health care services
provided outside the United States is made on
the basis of the amount that would have been
paid by the State health security program for
similar services rendered in the State, with due
regard, in the case of hospital services, to the
size of the hospital, standards of service, and
other relevant factors.
(b) 
CROSS-BORDER
ARRANGEMENTS.—A 
State
health security program for a State may negotiate with
such a program in an adjacent State a reciprocal arrange-
ment for the coverage under such other program of health
care services to enrollees residing in the border region.
SEC. 105. EFFECTIVE DATE OF BENEFITS.
Benefits shall first be available under this Act for
items and services furnished on or after January 1, 1997.
SEC. 106. RELATIONSHIP TO EXISTING FEDERAL HEALTH
PROGRAMS.
(a) MEDICARE AND MEDICAID.—
(1) IN GENERAL.—Notwithstanding any other
provision of law, subject to paragraph (2)—
(A) no benefits shall be available under
title XVIII of the Social Security Act for any
item or service furnished after December 31,
1996,
(B) no individual is entitled to medical as-
sistance under a State plan approved under
title XIX of such Act for any item or service
furnished after such date, and
(C) no payment shall be made to a State
under section 1903(a) of such Act with respect
to medical assistance for any item or service
furnished after such date.
(2) TRANSITION.—In the case of inpatient hos-
pital services and extended care services during a
continuous period of stay which began before Janu-
ary 1, 1997, and which had not ended as of such
date, for which benefits are provided under title
XVIII, or under a State plan under title XIX, of the
Social Security Act, the Secretary of Health and
Human Services and each State plan, respectively,
shall provide for continuation of benefits under such
title or plan until the end of the period of stay.
(b) FEDERAL EMPLOYEES HEALTH BENEFITS PRO-
GRAM.—No benefits shall be made available under chapter
89 of title 5, United States Code, for any part of a cov-
erage period occurring after December 31, 1996.
(c) CHAMPUS.—No benefits shall be made available
under sections 1079 and 1086 of title 10, United States
Code, for items or services furnished after December 31,
1996.
(d) TREATMENT OF BENEFITS FOR VETERANS AND
NATIVE AMERICANS.—Nothing in this Act shall affect the
eligibility of veterans for the medical benefits and services
provided under title 38, United States Code, or of Indians
for the medical benefits and services provided by or
through the Indian Health Service.
TITLE II—COMPREHENSIVE BEN-
EFITS, INCLUDING PREVEN-
TIVE BENEFITS AND BENE-
FITS FOR LONG-TERM CARE
SEC. 201. COMPREHENSIVE BENEFITS.
(a) IN GENERAL.—Subject to the succeeding provi-
sions of this title, individuals enrolled for benefits under
this Act are entitled to have payment made under a State
health security program for the following items and serv-
ices if medically necessary or appropriate for the mainte-
nance of health or for the diagnosis, treatment, or rehabili-
tation of a health condition:
(1) HOSPITAL SERVICES.—Inpatient and out-
patient hospital care, including 24-hour-a-day emer-
gency services.
(2) 
PROFESSIONAL
SERVICES.—Professional
services of health care practitioners authorized to
provide health care services under State law, includ-
ing patient education and training in self-manage-
ment techniques.
(3) 
COMMUNITY-BASED
PRIMARY
HEALTH
SERVICES.—Community-based primary health serv-
ices (as defined in section 202(a)).
(4) PREVENTIVE
SERVICES.—Preventive serv-
ices (as defined in section 202(b)).
(5) LONG-TERM, ACUTE, AND CHRONIC CARE
SERVICES.—
(A) Nursing facility services.
(B) Home health services.
(C) Home and community-based long-term
care services (as defined in section 202(c)) for
individuals described in section 203(a).
(D) Hospice care.
(E) Services in intermediate care facilities
for individuals with mental retardation.
(6) PRESCRIPTION DRUGS, BIOLOGICALS, INSU-
LIN, MEDICAL FOODS.—
(A) Outpatient prescription drugs and
biologicals, as specified by the Board consistent
with section 515.
(B) Insulin.
(C) Medical foods (as defined in section
202(e)).
(7) DENTAL SERVICES.—Dental services (as de-
fined in section 202(h)).
(8) MENTAL HEALTH AND SUBSTANCE ABUSE
TREATMENT
SERVICES.—Mental health and sub-
stance abuse treatment services (as defined in sec-
tion 202(f)).
(9) DIAGNOSTIC TESTS.—Diagnostic tests.
(10) OTHER ITEMS AND SERVICES.—
(A) OUTPATIENT
THERAPY.—Outpatient
physical therapy services, outpatient speech pa-
thology services, and outpatient occupational
therapy services in all settings.
(B) DURABLE MEDICAL EQUIPMENT.—Du-
rable medical equipment.
(C) HOME DIALYSIS.—Home dialysis sup-
plies and equipment.
(D) AMBULANCE.—Emergency ambulance
service.
(E) PROSTHETIC DEVICES.—Prosthetic de-
vices, including replacements of such devices.
(F) ADDITIONAL ITEMS AND SERVICES.—
Such other medical or health care items or
services as the Board may specify.
(b) COST-SHARING.—
(1) IN GENERAL.—Except as provided in this
subsection, there are no deductibles, coinsurance, or
copayments applicable to acute care and preventive
benefits provided under this title.
(2) COST-SHARING
FOR
LONG-TERM
CARE
SERVICES.—
(A) IN GENERAL.—
(i) payments for home and commu-
nity-based long-term care services are sub-
ject to coinsurance of 20 percent, and
(ii) payments for nursing facility serv-
ices are subject to coinsurance of 35 per-
cent.
(B) EXCEPTION.—With respect to the co-
insurance 
established 
under 
subparagraph
(A)—
(i) such coinsurance shall not apply to
an individual with income (as defined by
the Secretary) of not more than 100 per-
cent of the income official poverty line ap-
plicable to a family of the size involved;
and
(ii) in the case of an individual with
such income that exceeds 100 percent, but
is less than 200 percent, of such applicable
poverty line, the coinsurance shall be re-
duced in the same proportion as the pro-
portion of such income is less than 200
percent of such applicable poverty line.
(c) PROHIBITION OF BALANCE BILLING.—As pro-
vided in section 531, no person may impose a charge for
covered services for which benefits are provided under this
Act.
(d) NO DUPLICATE HEALTH INSURANCE.—Each
State health security program shall prohibit the sale of
health insurance in the State if payment under the insur-
ance duplicates payment for any items or services for
which payment may be made under such a program.
(e) STATE PROGRAM MAY PROVIDE ADDITIONAL
BENEFITS.—Nothing in this Act shall be construed as
limiting the benefits that may be made available under a
State health security program to residents of the State
at the expense of the State.
(f) EMPLOYERS MAY PROVIDE ADDITIONAL BENE-
FITS.—Nothing in this Act shall be construed as limiting
the additional benefits that an employer may provide to
employees or their dependents, or to former employees or
their dependents.
SEC. 202. DEFINITIONS RELATING TO SERVICES.
(a) COMMUNITY-BASED PRIMARY HEALTH SERV-
ICES.—In this title, the term ‘‘community-based primary
health services’’ means ambulatory health services fur-
nished—
(1) by a rural health clinic;
(2) by a Federally qualified health center (as
defined in section 1905(l)(2)(B) of the Social Secu-
rity Act), and which, for purposes of this Act, in-
clude services furnished by State and local health
agencies;
(3) in a school-based setting;
(4) by public educational agencies and other
providers of services to children entitled to assist-
ance under the Individuals with Disabilities Edu-
cation Act for services furnished pursuant to a
written Individualized Family Services Plan or
Individual Education Plan under such Act; and
(5) public and private nonprofit entities receiv-
ing Federal assistance under the Public Health
Service Act.
(b) PREVENTIVE SERVICES.—
(1) IN GENERAL.—In this title, the term ‘‘pre-
ventive services’’ means items and services—
(A) which—
(i) are specified in paragraph (2), or
(ii) the Board determines to be effec-
tive in the maintenance and promotion of
health or minimizing the effect of illness,
disease, or medical condition; and
(B) which are provided consistent with the
periodicity schedule established under para-
graph (3).
(2) SPECIFIED
PREVENTIVE
SERVICES.—The
services specified in this paragraph are as follows:
(A) Basic immunizations.
(B) Prenatal and well-baby care (for in-
fants under one year of age).
(C) Well-child care (including periodic
physical examinations, hearing and vision
screening, and developmental screening and ex-
aminations) for individuals under 18 years of
age.
(D) Periodic screening mammography, Pap
smears, and colorectal examinations and exami-
nations for prostate cancer.
(E) Physical examinations.
(F) Family planning services.
(G) Routine eye examinations, eyeglasses,
and contact lenses.
(H) Hearing aids, but only upon a deter-
mination of a certified audiologist or physician
that a hearing problem exists and is caused by
a condition that can be corrected by use of a
hearing aid.
(3) SCHEDULE.—The Board shall establish, in
consultation with experts in preventive medicine and
public health and taking into consideration those
preventive services recommended by the Preventive
Services Task Force and published as the Guide to
Clinical Preventive Services, a periodicity schedule
for the coverage of preventive services under para-
graph (1). Such schedule shall take into consider-
ation the cost-effectiveness of appropriate preventive
care and shall be revised not less frequently than
once every 5 years, in consultation with experts in
preventive medicine and public health.
(c) HOME
AND
COMMUNITY-BASED
LONG-TERM
CARE SERVICES.—In this title, the term ‘‘home and com-
munity-based long-term care services’’ means the following
services provided to an individual to enable the individual
to remain in such individual’s place of residence within
the community:
(1) Home health aide services.
(2) Adult day health care, social day care or
psychiatric day care.
(3) Medical social work services.
(4) Care coordination services, as defined in
subsection (g)(1).
(5) Respite care, including training for informal
caregivers.
(6) Personal assistance services, and home-
maker services (including meals) incidental to the
provision of personal assistance services.
(d) HOME HEALTH SERVICES.—
(1) IN
GENERAL.—The term ‘‘home health
services’’ means items and services described in sec-
tion 1861(m) of the Social Security Act and includes
home infusion services.
(2) HOME
INFUSION
SERVICES.—The term
‘‘home infusion services’’ includes the nursing, phar-
macy, and related services that are necessary to con-
duct the home infusion of a drug regimen safely and
effectively under a plan established and periodically
reviewed by a physician and that are provided in
compliance with quality assurance requirements es-
tablished by the Secretary.
(e) MEDICAL FOODS.—In this title, the term ‘‘medi-
cal foods’’ means foods which are formulated to be
consumed or administered enterally under the supervision
of a physician and which are intended for the specific die-
tary management of a disease or condition for which
distinctive nutritional requirements, based on recognized
scientific principles, are established by medical evaluation.
(f) MENTAL
HEALTH
AND
SUBSTANCE
ABUSE
TREATMENT SERVICES.—
(1) SERVICES
DESCRIBED.—In this title, the
term ‘‘mental health and substance abuse treatment
services’’ means the following services related to the
prevention, diagnosis, treatment, and rehabilitation
of mental illness and promotion of mental health:
(A) INPATIENT HOSPITAL SERVICES.—In-
patient hospital services furnished primarily for
the diagnosis or treatment of mental illness or
substance abuse for up to 60 days during a
year, reduced by a number of days determined
by the Secretary so that the actuarial value of
providing such number of days of services
under this paragraph to the individual is equal
to the actuarial value of the days of inpatient
residential services furnished to the individual
under subparagraph (B) during the year after
such services have been furnished to the indi-
vidual for 120 days during the year (rounded to
the nearest day), but only if (with respect to
services furnished to an individual described in
section 204(b)(1)) such services are furnished
in conformity with the plan of an organized sys-
tem of care for mental health and substance
abuse services in accordance with section
204(b)(2).
(B) INTENSIVE RESIDENTIAL SERVICES.—
Intensive residential services (as defined in
paragraph (2)) furnished to an individual for
up to 120 days during any calendar year, ex-
cept that—
(i) such services may be furnished to
the individual for additional days during
the year if necessary for the individual to
complete a course of treatment to the ex-
tent that the number of days of inpatient
hospital services described in subparagraph
(A) that may be furnished to the individual
during the year (as reduced under such
subparagraph) is not less than 15; and
(ii) reduced by a number of days de-
termined by the Secretary so that the actu-
arial value of providing such number of
days of services under this paragraph to
the individual is equal to the actuarial
value of the days of intensive community-
based services furnished to the individual
under subparagraph (D) during the year
after such services have been furnished to
the individual for 90 days (or, in the case
of services described in subparagraph
(D)(ii), for 180 days) during the year
(rounded to the nearest day).
(C) OUTPATIENT
SERVICES.—Outpatient
treatment services of mental illness or sub-
stance abuse (other than intensive community-
based services under subparagraph (D)) for an
unlimited number of days during any calendar
year furnished in accordance with standards es-
tablished by the Secretary for the management
of such services, and, in the case of services fur-
nished to an individual described in section
204(b)(1) who is not an inpatient of a hospital,
in conformity with the plan of an organized sys-
tem of care for mental health and substance
abuse services in accordance with section
204(b)(2).
(D) INTENSIVE COMMUNITY-BASED SERV-
ICES.—Intensive community-based services (as
described in paragraph (3))—
(i) for an unlimited number of days
during any calendar year, in the case of
services described in section 1861(ff)(2)(E)
that are furnished to an individual who is
a seriously mentally ill adult, a seriously
emotionally disturbed child, or an adult or
child with serious substance abuse disorder
(as determined in accordance with criteria
established by the Secretary);
(ii) in the case of services described in
section 1861(ff)(2)(C), for up to 180 days
during any calendar year, except that such
services may be furnished to the individual
for a number of additional days during the
year equal to the difference between the
total number of days of intensive residen-
tial services which the individual may re-
ceive during the year under part A (as de-
termined under subparagraph (B)) and the
number of days of such services which the
individual has received during the year, or
(iii) in the case of any other such
services, for up to 90 days during any cal-
endar year, except that such services may
be furnished to the individual for the num-
ber of additional days during the year de-
scribed in clause (ii).
(2) INTENSIVE
RESIDENTIAL
SERVICES
DE-
FINED.—
(A) IN
GENERAL.—Subject to subpara-
graphs (B) and (C), the term ‘‘intensive resi-
dential services’’ means inpatient services pro-
vided in any of the following facilities:
(i) Residential detoxification centers.
(ii) Crisis residential programs or
mental illness residential treatment pro-
grams.
(iii) Therapeutic family or group
treatment homes.
(iv) Residential centers for substance
abuse treatment.
(B) REQUIREMENTS FOR FACILITIES.—No
service may be treated as an intensive residen-
tial service under subparagraph (A) unless the
facility at which the service is provided—
(i) is legally authorized to provide
such service under the law of the State (or
under a State regulatory mechanism pro-
vided by State law) in which the facility is
located or is certified to provide such serv-
ice by an appropriate accreditation entity
approved by the State in consultation with
the Secretary; and
(ii) meets such other requirements as
the Secretary may impose to assure the
quality of the intensive residential services
provided.
(C) SERVICES
FURNISHED
TO
AT-RISK
CHILDREN.—In the case of services furnished
to an individual described in section 204(b)(1),
no service may be treated as an intensive resi-
dential service under this subsection unless the
service is furnished in conformity with the plan
of an organized system of care for mental
health and substance abuse services in accord-
ance with section 204(b)(2).
(D) MANAGEMENT STANDARDS.—No serv-
ice may be treated as an intensive residential
service under subparagraph (A) unless the serv-
ice is furnished in accordance with standards
established by the Secretary for the manage-
ment of such services.
(3) INTENSIVE
COMMUNITY-BASED
SERVICES
DEFINED.—
(A) IN
GENERAL.—The term ‘‘intensive
community-based services’’ means the items
and services described in subparagraph (B) pre-
scribed by a physician (or, in the case of serv-
ices furnished to an individual described in sec-
tion 204(b)(1), by an organized system of care
for mental health and substance abuse services
in accordance with such section) and provided
under a program described in subparagraph
(D) under the supervision of a physician (or, to
the extent permitted under the law of the State
in which the services are furnished, a non-phy-
sician mental health professional) pursuant to
an individualized, written plan of treatment es-
tablished and periodically reviewed by a physi-
cian (in consultation with appropriate staff par-
ticipating in such program) which sets forth the
physician’s diagnosis, the type, amount, fre-
quency, and duration of the items and services
provided under the plan, and the goals for
treatment under the plan, but does not include
any item or service that is not furnished in ac-
cordance with standards established by the Sec-
retary for the management of such services.
(B) ITEMS AND SERVICES DESCRIBED.—
The items and services described in this sub-
paragraph are—
(i) partial hospitalization services con-
sisting of the items and services described
in subparagraph (C);
(ii) psychiatric rehabilitation services;
(iii) day treatment services for indi-
viduals under 19 years of age;
(iv) in-home services;
(v) case management services, includ-
ing collateral services designated as such
case management services by the Sec-
retary;
(vi) ambulatory detoxification services;
(vii) such other items and services as
the Secretary may provide (but in no event
to include meals and transportation),
that are reasonable and necessary for the diag-
nosis or active treatment of the individual’s
condition, reasonably expected to improve or
maintain the individual’s condition and func-
tional level and to prevent relapse or hos-
pitalization, and furnished pursuant to such
guidelines relating to frequency and duration of
services as the Secretary shall by regulation es-
tablish (taking into account accepted norms of
medical practice and the reasonable expectation
of patient improvement).
(C) ITEMS
AND
SERVICES
INCLUDED
AS
PARTIAL
HOSPITALIZATION
SERVICES.—For
purposes of subparagraph (B)(i), partial hos-
pitalization services consist of the following:
(i) Individual and group therapy with
physicians or psychologists (or other men-
tal health professionals to the extent au-
thorized under State law).
(ii) Occupational therapy requiring
the skills of a qualified occupational thera-
pist.
(iii) Services of social workers, trained
psychiatric nurses, behavioral aides, and
other staff trained to work with psychiatric
patients (to the extent authorized under
State law).
(iv) Drugs and biologicals furnished
for therapeutic purposes (which cannot, as
determined in accordance with regulations,
be self-administered).
(v) Individualized activity therapies
that are not primarily recreational or di-
versionary.
(vi) Family counseling (the primary
purpose of which is treatment of the indi-
vidual’s condition).
(vii) Patient training and education
(to the extent that training and edu-
cational activities are closely and clearly
related to the individual’s care and treat-
ment).
(viii) Diagnostic services.
(D) PROGRAMS
DESCRIBED.—A program
described in this subparagraph is a program
(whether facility-based or freestanding) which is
furnished by an entity—
(i) legally authorized to furnish such a
program under State law (or the State reg-
ulatory mechanism provided by State law)
or certified to furnish such a program by
an appropriate accreditation entity ap-
proved by the State in consultation with
the Secretary; and
(ii) meeting such other requirements
as the Secretary may impose to assure the
quality of the intensive community-based
services provided.
(g) CARE COORDINATION SERVICES.—
(1) IN GENERAL.—In this title, the term ‘‘care
coordination services’’ means services provided by
care coordinators (as defined in paragraph (2)) to
individuals described in paragraph (3) for the co-
ordination and monitoring of home and community-
based long term care services to ensure appropriate,
cost-effective utilization of such services in a com-
prehensive and continuous manner, and includes—
(A) transition management between inpa-
tient facilities and community-based services,
including assisting patients in identifying and
gaining access to appropriate ancillary services;
and
(B) evaluating and recommending appro-
priate treatment services, in cooperation with
patients and other providers and in conjunction
with any quality review program or plan of care
under section 205.
(2) CARE COORDINATOR.—
(A) IN GENERAL.—In this title, the term
‘‘care coordinator’’ means an individual or non-
profit or public agency or organization which
the State health security program determines—
(i) is capable of performing directly,
efficiently, and effectively the duties of a
care coordinator described in paragraph
(1), and
(ii) demonstrates capability in estab-
lishing and periodically reviewing and re-
vising plans of care, and in arranging for
and monitoring the provision and quality
of services under any plan.
(B) INDEPENDENCE.—State health secu-
rity programs shall establish safeguards to as-
sure that care coordinators have no financial in-
terest in treatment decisions or placements.
Care coordination may not be provided through
any structure or mechanism through which
quality review is performed.
(3) ELIGIBLE INDIVIDUALS.—An individual de-
scribed in this paragraph is an individual described
in section 203 (relating to individuals qualifying for
long term and chronic care services).
(h) DENTAL SERVICES.—
(1) IN GENERAL.—In this title, subject to sub-
section (b), the term ‘‘dental services’’ means the
following:
(A) Emergency dental treatment, including
extractions, for bleeding, pain, acute infections,
and injuries to the maxillofacial region.
(B) Prevention and diagnosis of dental dis-
ease, including examinations of the hard and
soft tissues of the oral cavity and related struc-
tures, radiographs, dental sealants, fluorides,
and dental prophylaxis.
(C) Treatment of dental disease, including
non-cast fillings, periodontal maintenance serv-
ices, and endodontic services.
(D) Space maintenance procedures to pre-
vent orthodontic complications.
(E) Orthodontic treatment to prevent se-
vere malocclusions.
(F) Full dentures.
(G) Medically necessary oral health care.
(H) Any items and services for special
needs patients that are not described in sub-
paragraphs (A) through (G) and that—
(i) are required to provide such pa-
tients the items and services described in
subparagraphs (A) through (G);
(ii) are required to establish oral func-
tion (including general anesthesia for indi-
viduals with physical or emotional limita-
tions that prevent the provision of dental
care without such anesthesia);
(iii) consist of orthodontic care for se-
vere dentofacial abnormalities; or
(iv) consist of prosthetic dental de-
vices for genetic or birth defects or fitting
for such devices.
(I) Any dental care for individuals with a
seizure disorder that is not described in sub-
paragraphs (A) through (H) and that is re-
quired because of an illness, injury, disorder, or
other health condition that results from such
seizure disorder.
(2) LIMITATIONS.—Dental services are subject
to the following limitations:
(A) PREVENTION AND DIAGNOSIS.—
(i) 
EXAMINATIONS
AND
PROPHY-
LAXIS.—The examinations and prophylaxis
described in paragraph (1)(B) are covered
only consistent with a periodicity schedule
established by the Board, which schedule
may provide for special treatment of indi-
viduals less than 18 years of age and of
special needs patients.
(ii) DENTAL SEALANTS.—The dental
sealants described in such paragraph are
not covered for individuals 18 years of age
or older. Such sealants are covered for in-
dividuals less than 10 years of age for pro-
tection of the 1st permanent molars. Such
sealants are covered for individuals 10
years of age or older for protection of the
2d permanent molars.
(B) TREATMENT OF DENTAL DISEASE.—
Prior to January 1, 2002, the items and serv-
ices described in paragraph (1)(C) are covered
only for individuals less than 18 years of age
and special needs patients. On or after such
date, such items and services are covered for all
individuals enrolled for benefits under this Act,
except that endodontic services are not covered
for individuals 18 years of age or older.
(C) SPACE MAINTENANCE.—The items and
services described in paragraph (1)(D) are cov-
ered only for individuals at least 3 years of age,
but less than 13 years of age and—
(i) are limited to posterior teeth;
(ii) involve maintenance of a space or
spaces for permanent posterior teeth that
would otherwise be prevented from normal
eruption if the space were not maintained;
and
(iii) do not include a space maintainer
that is placed within 6 months of the ex-
pected eruption of the permanent posterior
tooth concerned.
(D) ORTHODONTIC TREATMENT.—Prior to
January 1, 2002, the items and services de-
scribed in paragraph (1)(E) are covered only
for individuals at least 6 years of age, but less
than 12 years of age, who have severe
dentofacial abnormalities. On or after such
date, such items and services are covered only
for individuals at least 6 years of age, but less
than 12 years of age.
(E) DENTURES.—Prior to January 1,
2002, the dentures described in paragraph
(1)(F) are not covered, except for special needs
patients. On or after such date, dentures are
covered for an individual consistent with a peri-
odicity schedule established by the Board, ex-
cept that the limitation of periodicity provided
in such schedule shall not apply to a special
needs patient.
(3) DEFINITIONS.—For purposes of this title:
(A) MEDICALLY NECESSARY ORAL HEALTH
CARE.—The term ‘‘medically necessary oral
health care’’ means oral health care that is re-
quired as a direct result of, or would have a di-
rect impact on, an underlying medical condi-
tion. Such term includes oral health care di-
rected toward control or elimination of pain, in-
fection, or reestablishment of oral function.
(B) SPECIAL NEEDS PATIENT.—The term
‘‘special needs patient’’ includes an individual
with a genetic or birth defect, a developmental
disability, or an acquired medical disability.
(i) NURSING FACILITY; NURSING FACILITY SERV-
ICES.—Except as may be provided by the Board, the
terms ‘‘nursing facility’’ and ‘‘nursing facility services’’
have the meanings given such terms in sections 1919(a)
and 1905(f), respectively, of the Social Security Act.
(j) SERVICES IN INTERMEDIATE CARE FACILITIES
FOR INDIVIDUALS WITH MENTAL RETARDATION.—Ex-
cept as may be provided by the Board—
(1) the term ‘‘intermediate care facility for indi-
viduals with mental retardation’’ has the meaning
specified in section 1905(d) of the Social Security
Act (as in effect before the enactment of this Act);
and
(2) the term ‘‘services in intermediate care fa-
cilities for individuals with mental retardation’’
means services described in section 1905(a)(15) of
such Act (as so in effect) in an intermediate care fa-
cility for individuals with mental retardation to an
individual determined to require such services in ac-
cordance with standards specified by the Board and
comparable to the standards described in section
1902(a)(31)(A) of such Act (as so in effect).
(k) OTHER TERMS.—Except as may be provided by
the Board, the definitions contained in section 1861 of the
Social Security Act shall apply.
SEC. 203. SPECIAL RULES FOR HOME AND COMMUNITY-
BASED LONG-TERM CARE SERVICES.
(a) QUALIFYING INDIVIDUALS.—For purposes of sec-
tion 201(a)(5)(C), individuals described in this subsection
are the following individuals:
(1) ADULTS.—Individuals 18 years of age or
older determined (in a manner specified by the
Board)—
(A) to be unable to perform, without the
assistance of an individual, at least 2 of the fol-
lowing 5 activities of daily living (or who has a
similar level of disability due to cognitive
impairment)—
(i) bathing;
(ii) eating;
(iii) dressing;
(iv) toileting; and
(v) transferring in and out of a bed or
in and out of a chair;
(B) due to cognitive or mental impair-
ments, to require supervision because the indi-
vidual behaves in a manner that poses health or
safety hazards to himself or herself or others;
or
(C) due to cognitive or mental impair-
ments, to require queuing to perform activities
of daily living.
(2) CHILDREN.—Individuals under 18 years of
age determined (in a manner specified by the Board)
to meet such alternative standard of disability for
children as the Board develops. Such alternative
standard shall be comparable to the standard for
adults and appropriate for children.
(b) LIMIT ON SERVICES.—
(1) IN GENERAL.—The aggregate expenditures
by a State health security program with respect to
home and community-based long-term care services
in a period (specified by the Board) may not exceed
65 percent (or such alternative ratio as the Board
establishes under paragraph (2)) of the average of
the amount of payment that would have been made
under the program during the period if all the home-
based long-term care beneficiaries had been resi-
dents of nursing facilities in the same area in which
the services were provided.
(2) ALTERNATIVE RATIO.—The Board may es-
tablish for purposes of paragraph (1) an alternative
ratio (of payments for home and community-based
long term care services to payments for nursing fa-
cility services) as the Board determines to be more
consistent with the goal of providing cost-effective
long-term care in the most appropriate and least
restrictive setting.
SEC. 204. EXCLUSIONS AND LIMITATIONS.
(a) IN GENERAL.—Subject to section 201(e), benefits
for service are not available under this Act unless the
services meet the standards specified in section 201(a).
(b) SPECIAL DELIVERY REQUIREMENTS FOR MEN-
TAL HEALTH AND SUBSTANCE ABUSE TREATMENT SERV-
ICES PROVIDED TO AT-RISK CHILDREN.—
(1) REQUIRING
SERVICES
TO
BE
PROVIDED
THROUGH ORGANIZED SYSTEMS OF CARE.—A State
health security program shall ensure that mental
health services and substance abuse treatment serv-
ices are furnished through an organized system of
care, as described in paragraph (2), if—
(A) the services are provided to an individ-
ual less than 22 years of age;
(B) the individual has a serious emotional
disturbance or a substance abuse disorder; and
(C) the individual is, or is at imminent risk
of being, subject to the authority of, or in need
of the services of, at least 1 public agency that
serves the needs of children, including an agen-
cy involved with child welfare, special education,
juvenile justice, or criminal justice.
(2) REQUIREMENTS FOR SYSTEM OF CARE.—In
this subsection, an ‘‘organized system of care’’ is a
community-based service delivery network, which
may consist of public and private providers, that
meets the following requirements:
(A) The system has established linkages
with existing mental health services and sub-
stance abuse treatment service delivery pro-
grams in the plan service area (or is in the
process of developing or operating a system
with appropriate public agencies in the area to
coordinate the delivery of such services to indi-
viduals in the area).
(B) The system provides for the participa-
tion and coordination of multiple agencies and
providers that serve the needs of children in the
area, including agencies and providers involved
with child welfare, education, juvenile justice,
criminal justice, health care, mental health, and
substance abuse prevention and treatment.
(C) The system provides for the involve-
ment of the families of children to whom mental
health services and substance abuse treatment
services are provided in the planning of treat-
ment and the delivery of services.
(D) The system provides for the develop-
ment and implementation of individualized
treatment plans by multidisciplinary and multi-
agency teams, which are recognized and fol-
lowed by the applicable agencies and providers
in the area.
(E) The system ensures the delivery and
coordination of the range of mental health serv-
ices and substance abuse treatment services re-
quired by individuals under 22 years of age who
have a serious emotion disturbance or a sub-
stance abuse disorder.
(F) The system provides for the manage-
ment of the individualized treatment plans de-
scribed in subparagraph (D) and for a flexible
response to changes in treatment needs over
time.
(c) TREATMENT OF EXPERIMENTAL SERVICES.—In
applying subsection (a), the Board shall make national
coverage determinations with respect to those services that
are experimental in nature. Such determinations shall be
made consistent with a process that provides for input
from representatives of health care professionals and pa-
tients and public comment.
(d) APPLICATION
OF PRACTICE GUIDELINES.—In
the case of services for which the American Health Secu-
rity Quality Council (established under section 501) has
recognized a national practice guideline, the services are
considered to meet the standards specified in section
201(a) if they have been provided in accordance with such
guideline or in accordance with such guidelines as are pro-
vided by the State health security program consistent with
title V. For purposes of this subsection, a service shall
be considered to have been provided in accordance with
a practice guideline if the health care provider providing
the service exercised appropriate professional discretion to
deviate from the guideline in a manner authorized or an-
ticipated by the guideline.
(e) SPECIFIC LIMITATIONS.—
(1) LIMITATIONS
ON
EYEGLASSES, CONTACT
LENSES, HEARING
AIDS, AND
DURABLE
MEDICAL
EQUIPMENT.—Subject to section 201(e), the Board
may impose such limits relating to the costs and fre-
quency of replacement of eyeglasses, contact lenses,
hearing aids, and durable medical equipment to
which individuals enrolled for benefits under this Act
are entitled to have payment made under a State
health security program as the Board deems appro-
priate.
(2) OVERLAP WITH PREVENTIVE SERVICES.—
The coverage of services described in section 201(a)
(other than paragraph (3)) which also are preventive
services are required to be covered only to the extent
that they are required to be covered as preventive
services.
(3) MISCELLANEOUS EXCLUSIONS FROM COV-
ERED SERVICES.—Covered services under this Act
do not include the following:
(A) Surgery and other procedures (such as
orthodontia) performed solely for cosmetic pur-
poses (as defined in regulations) and hospital or
other services incident thereto, unless—
(i) required to correct a congenital
anomaly;
(ii) required to restore or correct a
part of the body which has been altered as
a result of accidental injury, disease, or
surgery; or
(iii) otherwise determined to be medi-
cally necessary and appropriate under sec-
tion 201(a).
(B) Personal comfort items or private
rooms in inpatient facilities, unless determined
to be medically necessary and appropriate
under section 201(a).
(C) The services of a professional practi-
tioner if they are furnished in a hospital or
other facility which is not a participating pro-
vider.
(f) NURSING
FACILITY
SERVICES
AND
HOME
HEALTH SERVICES.—Nursing facility services and home
health services (other than post-hospital services, as de-
fined by the Board) furnished to an individual who is not
described in section 203(a) are not covered services unless
the services are determined to meet the standards speci-
fied in section 201(a) and, with respect to nursing facility
services, to be provided in the least restrictive and most
appropriate setting.
SEC. 205. CERTIFICATION; QUALITY REVIEW; PLANS OF
CARE.
(a) CERTIFICATIONS.—State health security pro-
grams may require, as a condition of payment for institu-
tional health care services and other services of the type
described in such sections 1814(a) and 1835(a) of the So-
cial Security Act, periodic professional certifications of the
kind described in such sections.
(b) QUALITY REVIEW.—For requirement that each
State health security program establish a quality review
program that meets the requirements for such a program
under title V, see section 404(b)(1)(H).
(c) PLAN OF CARE REQUIREMENTS.—A State health
security program may require, consistent with standards
established by the Board, that payment for services ex-
ceeding specified levels or duration be provided only as
consistent with a plan of care or treatment formulated by
one or more providers of the services or other qualified
professionals. Such a plan may include, consistent with
subsection (b), case management at specified intervals as
a further condition of payment for services.
TITLE III—PROVIDER
PARTICIPATION
SEC. 301. PROVIDER PARTICIPATION AND STANDARDS.
(a) IN GENERAL.—An individual or other entity fur-
nishing any covered service under a State health security
program under this Act is not a qualified provider unless
the individual or entity—
(1) is a qualified provider of the services under
section 302;
(2) has filed with the State health security pro-
gram a participation agreement described in sub-
section (b); and
(3) meets such other qualifications and condi-
tions as are established by the Board or the State
health security program under this Act.
(b) REQUIREMENTS
IN
PARTICIPATION
AGREE-
MENT.—
(1) IN
GENERAL.—A participation agreement
described in this subsection between a State health
security program and a provider shall provide at
least for the following:
(A) Services to eligible persons will be fur-
nished by the provider without discrimination
on the ground of race, national origin, income,
religion, age, sex or sexual orientation, disabil-
ity, handicapping condition, or (subject to the
professional qualifications of the provider) ill-
ness. Nothing in this subparagraph shall be
construed as requiring the provision of a type
or class of services which services are outside
the scope of the provider’s normal practice.
(B) No charge will be made for any cov-
ered services other than for payment authorized
by this Act.
(C) The provider agrees to furnish such in-
formation as may be reasonably required by the
Board or a State health security program, in
accordance with uniform reporting standards
established under section 401(g)(1), for—
(i) quality review by designated enti-
ties;
(ii) the making of payments under
this Act (including the examination of
records as may be necessary for the ver-
ification of information on which payments
are based);
(iii) statistical or other studies re-
quired for the implementation of this Act;
and
(iv) such other purposes as the Board
or State may specify.
(D) The provider agrees not to bill the pro-
gram for any services for which benefits are not
available because of section 204(d).
(E) In the case of a provider that is not
an individual, the provider agrees not to employ
or use for the provision of health services any
individual or other provider who or which has
had a participation agreement under this sub-
section terminated for cause.
(F) In the case of a provider paid under a
fee-for-service basis under section 612, the pro-
vider agrees to submit bills and any required
supporting documentation relating to the provi-
sion of covered services within 30 days (or such
shorter period as a State health security pro-
gram may require) after the date of providing
such services.
(2) TERMINATION
OF
PARTICIPATION
AGREE-
MENTS.—
(A) IN
GENERAL.—Participation agree-
ments may be terminated, with appropriate no-
tice—
(i) by the Board or a State health se-
curity program for failure to meet the
requirements of this title, or
(ii) by a provider.
(B) TERMINATION
PROCESS.—Providers
shall be provided notice and a reasonable oppor-
tunity to correct deficiencies before the Board
or a State health security program terminates
an agreement unless a more immediate termi-
nation is required for public safety or similar
reasons.
SEC. 302. QUALIFICATIONS FOR PROVIDERS.
(a) IN GENERAL.—A health care provider is consid-
ered to be qualified to provide covered services if the pro-
vider is licensed or certified and meets—
(1) all the requirements of State law to provide
such services,
(2) applicable requirements of Federal law to
provide such services, and
(3) any applicable standards established under
subsection (b).
(b) MINIMUM PROVIDER STANDARDS.—
(1) IN GENERAL.—The Board shall establish,
evaluate, and update national minimum standards to
assure the quality of services provided under this
Act and to monitor efforts by State health security
programs to assure the quality of such services. A
State health security program may also establish ad-
ditional minimum standards which providers must
meet.
(2) NATIONAL MINIMUM STANDARDS.—The na-
tional minimum standards under paragraph (1) shall
be established for institutional providers of services,
individual health care practitioners, and comprehen-
sive health service organizations. Except as the
Board may specify in order to carry out this title,
a hospital, nursing facility, or other institutional
provider of services shall meet standards for such a
facility under the medicare program under title
XVIII of the Social Security Act. Such standards
also may include, where appropriate, elements relat-
ing to—
(A) adequacy and quality of facilities;
(B) training and competence of personnel
(including continuing education requirements);
(C) comprehensiveness of service;
(D) continuity of service;
(E) patient satisfaction (including waiting
time and access to services); and
(F) performance standards (including or-
ganization, facilities, structure of services, effi-
ciency of operation, and outcome in palliation,
improvement of health, stabilization, cure, or
rehabilitation).
(3) TRANSITION
IN
APPLICATION.—If the
Board provides for additional requirements for pro-
viders under this subsection, any such additional re-
quirement shall be implemented in a manner that
provides for a reasonable period during which a pre-
viously qualified provider is permitted to meet such
an additional requirement.
(4) EXCHANGE OF INFORMATION.—The Board
shall provide for an exchange, at least annually,
among State health security programs of informa-
tion with respect to quality assurance and cost
containment.
SEC. 303. QUALIFICATIONS FOR COMPREHENSIVE HEALTH
SERVICE ORGANIZATIONS.
(a) IN GENERAL.—For purposes of this Act, a com-
prehensive health service organization (in this section re-
ferred to as a ‘‘CHSO’’) is a public or private organization
which, in return for a capitated payment amount, under-
takes to furnish, arrange for the provision of, or provide
payment with respect to—
(1) a full range of health services (as identified
by the Board), including at least hospital services
and physicians services, and
(2) out-of-area coverage in the case of urgently
needed services,
to an identified population which is living in or near a
specified service area and which enrolls voluntarily in the
organization.
(b) ENROLLMENT.—
(1) IN GENERAL.—All eligible persons living in
or near the specified service area of a CHSO are eli-
gible to enroll in the organization; except that the
number of enrollees may be limited to avoid overtax-
ing the resources of the organization.
(2) MINIMUM ENROLLMENT PERIOD.—Subject
to paragraph (3), the minimum period of enrollment
with a CHSO shall be twelve months, unless the en-
rolled individual becomes ineligible to enroll with the
organization.
(3) WITHDRAWAL
FOR
CAUSE.—Each CHSO
shall permit an enrolled individual to disenroll from
the organization for cause at any time.
(c) REQUIREMENTS FOR CHSOS.—
(1) ACCESSIBLE
SERVICES.—Each CHSO, to
the maximum extent feasible, shall make all services
readily and promptly accessible to enrollees who live
in the specified service area.
(2) CONTINUITY OF CARE.—Each CHSO shall
furnish services in such manner as to provide con-
tinuity of care and (when services are furnished by
different providers) shall provide ready referral of
patients to such services and at such times as may
be medically appropriate.
(3) BOARD OF DIRECTORS.—In the case of a
CHSO that is a private organization—
(A) 
CONSUMER
REPRESENTATION.—At
least one-third of the members of the CHSO’s
board of directors must be consumer members
with no direct or indirect, personal or family
financial relationship to the organization.
(B) PROVIDER
REPRESENTATION.—The
CHSO’s board of directors must include at
least one member who represents health care
providers.
(4) PATIENT
GRIEVANCE
PROGRAM.—Each
CHSO must have in effect a patient grievance pro-
gram and must conduct regularly surveys of the sat-
isfaction of members with services provided by or
through the organization.
(5) MEDICAL STANDARDS.—Each CHSO must
provide that a committee or committees of health
care practitioners associated with the organization
will promulgate medical standards, oversee the pro-
fessional aspects of the delivery of care, perform the
functions of a pharmacy and drug therapeutics com-
mittee, and monitor and review the quality of all
health services (including drugs, education, and pre-
ventive services).
(6) PREMIUMS.—Premiums or other charges by
a CHSO for any services not paid for under this Act
must be reasonable.
(7) UTILIZATION AND BONUS INFORMATION.—
Each CHSO must—
(A) comply with the requirements of sec-
tion 1876(i)(8) of the Social Security Act (re-
lating to prohibiting physician incentive plans
that provide specific inducements to reduce or
limit medically necessary services), and
(B) make available to its membership utili-
zation information and data regarding financial
performance, including bonus or incentive pay-
ment arrangements to practitioners.
(8) PROVISION OF SERVICES TO ENROLLEES AT
INSTITUTIONS
OPERATING
UNDER
GLOBAL
BUDG-
ETS.—The organization shall arrange to reimburse
for hospital services and other facility-based services
(as identified by the Board) for services provided to
members of the organization in accordance with the
global operating budget of the hospital or facility ap-
proved under section 611.
(9) BROAD
MARKETING.—Each CHSO must
provide for the marketing of its services (including
dissemination of marketing materials) to potential
enrollees in a manner that is designed to enroll indi-
viduals representative of the different population
groups and geographic areas included within its
service area and meets such requirements as the
Board or a State health security program may
specify.
(10) 
ADDITIONAL
REQUIREMENTS.—Each
CHSO must meet—
(A) such requirements relating to mini-
mum enrollment,
(B) such requirements relating to financial
solvency,
(C) such requirements relating to quality
and availability of care, and
(D) such other requirements,
as the Board or a State health security program
may specify.
(d) PROVISION
OF
EMERGENCY
SERVICES
TO
NONENROLLEES.—A CHSO may furnish emergency serv-
ices to persons who are not enrolled in the organization.
Payment for such services, if they are covered services to
eligible persons, shall be made to the organization unless
the organization requests that it be made to the individual
provider who furnished the services.
SEC. 304. LIMITATION ON CERTAIN PHYSICIAN REFERRALS.
(a) APPLICATION TO AMERICAN HEALTH SECURITY
PROGRAM.—Section 1877 of the Social Security Act, as
amended by subsections (b) and (c), shall apply under this
Act in the same manner as it applies under title XVIII
of the Social Security Act; except that in applying such
section under this Act any references in such section to
the Secretary or title XVIII of the Social Security Act are
deemed references to the Board and the American Health
Security Program under this Act, respectively.
(b) EXPANSION OF PROHIBITION TO CERTAIN ADDI-
TIONAL DESIGNATED SERVICES.—Section 1877(h)(6) of
the Social Security Act (42 U.S.C. 1395nn(h)(6)) is
amended by adding at the end the following:
‘‘(L) Ambulance services.
‘‘(M) Home infusion therapy services.’’.
(c) CONFORMING AMENDMENTS.—Section 1877 of
such Act is further amended—
(1) in subsection (a)(1)(A), by striking ‘‘for
which payment otherwise may be made under this
title’’ and by inserting ‘‘for which a charge is
imposed’’;
(2) in subsection (a)(1)(B), by striking ‘‘under
this title’’;
(3) by amending paragraph (1) of subsection
(g) to read as follows:
‘‘(1) DENIAL OF PAYMENT.—No payment may
be made under a State health security program for
a designated health service for which a claim is pre-
sented in violation of subsection (a)(1)(B). No indi-
vidual, third party payor, or other entity is liable for
payment for designated health services for which a
claim is presented in violation of such subsection.’’;
and
(4) in subsection (g)(3), by striking ‘‘for which
payment may not be made under paragraph (1)’’
and by inserting ‘‘for which such a claim may not
be presented under subsection (a)(1)’’.
TITLE IV—ADMINISTRATION
Subtitle A—General Administrative
Provisions
SEC. 
401. 
AMERICAN 
HEALTH 
SECURITY 
STANDARDS
BOARD.
(a) ESTABLISHMENT.—There is hereby established
an American Health Security Standards Board.
(b) APPOINTMENT AND TERMS OF MEMBERS.—
(1) IN
GENERAL.—The Board shall be com-
posed of—
(A) the Secretary of Health and Human
Services, and
(B) 6 other individuals (described in para-
graph (2)) appointed by the President with the
advice and consent of the Senate.
The President shall first nominate individuals under
subparagraph (B) on a timely basis so as to provide
for the operation of the Board by not later than
January 1, 1995.
(2) SELECTION
OF
APPOINTED
MEMBERS.—
With respect to the individuals appointed under
paragraph (1)(B):
(A) They shall be chosen on the basis of
backgrounds in health policy, health economics,
the healing professions, and the administration
of health care institutions.
(B) They shall provide a balanced point of
view with respect to the various health care in-
terests and at least two of them shall represent
the interests of individual consumers.
(C) Not more than three of them shall be
from the same political party.
(D) To the greatest extent feasible, they
shall represent the various geographic regions
of the United States and shall reflect the racial,
ethnic, and gender composition of the popu-
lation of the United States.
(3) TERMS OF APPOINTED MEMBERS.—Individ-
uals appointed under paragraph (1)(B) shall serve
for a term of 6 years, except that the terms of 5 of
the individuals initially appointed shall be, as des-
ignated by the President at the time of their ap-
pointment, for 1, 2, 3, 4, and 5 years. During a
term of membership on the Board, no member shall
engage in any other business, vocation or employ-
ment.
(c) VACANCIES.—
(1) IN GENERAL.—The President shall fill any
vacancy in the membership of the Board 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 Board.
(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 an appointed member of the Board for a
second term in the same manner as the original ap-
pointment. A member who has served for two con-
secutive 6-year terms shall not be eligible for re-
appointment until two years after the member has
ceased to serve.
(4) REMOVAL FOR CAUSE.—Upon confirmation,
members of the Board may not be removed except
by the President for cause.
(d) CHAIR.—The President shall designate one of the
members of the Board, other than the Secretary, to serve
at the will of the President as Chair of the Board.
(e) COMPENSATION.—Members of the Board (other
than the Secretary) shall be entitled 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 BOARD.—
(1) IN
GENERAL.—The Board shall develop
policies, procedures, guidelines, and requirements to
carry out this Act, including those related to—
(A) eligibility;
(B) enrollment;
(C) benefits;
(D) provider participation standards and
qualifications, as defined in title III;
(E) national and State funding levels;
(F) methods for determining amounts of
payments to providers of covered services, con-
sistent with subtitle B of title VI;
(G) the determination of medical necessity
and appropriateness with respect to coverage of
certain services;
(H) assisting State health security pro-
grams with planning for capital expenditures
and service delivery;
(I) planning for health professional edu-
cation funding (as specified in title VI);
(J) allocating funds provided under title
VII; and
(K) encouraging States to develop regional
planning mechanisms (described in section
404(a)(3)).
(2) REGULATIONS.—Regulations authorized by
this Act shall be issued by the Board in accordance
with the provisions of section 553 of title 5, United
States Code.
(g) UNIFORM REPORTING STANDARDS; ANNUAL RE-
PORT; STUDIES.—
(1) UNIFORM REPORTING STANDARDS.—
(A) IN GENERAL.—The Board shall estab-
lish uniform reporting requirements and stand-
ards to ensure an adequate national data base
regarding health services practitioners, services
and finances of State health security programs,
approved plans, providers, and the costs of fa-
cilities and practitioners providing services.
Such standards shall include, to the maximum
extent feasible, health outcome measures.
(B) REPORTS.—The Board shall analyze
regularly information reported to it, and to
State health security programs pursuant to
such requirements and standards.
(2) ANNUAL REPORT.—Beginning January 1,
of the second year beginning after the date of the
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 the second section 8G the
following:
‘‘§ 8I. 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. To
the greatest extent feasible, the membership of the Council
shall represent the various geographic regions of the Unit-
ed States and shall reflect the racial, ethnic, and gender
composition of the population of the United States.
(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
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. CONSULTATION WITH PRIVATE ENTITIES.
The Secretary and the Board shall consult with pri-
vate entities, such as professional societies, national asso-
ciations, nationally recognized associations of experts,
medical schools and academic health centers, consumer
groups, and labor and business organizations in the for-
mulation of guidelines, regulations, policy initiatives, and
information gathering to assure the broadest and most in-
formed input in the administration of this Act. Nothing
in this Act shall prevent the Secretary from adopting
guidelines developed by such a private entity if, in the Sec-
retary’s and Board’s judgment, such guidelines are gen-
erally accepted as reasonable and prudent and consistent
with this Act.
SEC. 404. 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 503.
(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, 2002, provide for
use of a uniform electronic data base in accord-
ance with section 505(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. To the greatest extent feasible, the
membership of each State Health Security Advisory
Council shall represent the various geographic re-
gions of the State and shall reflect the racial, ethnic,
and gender composition of the population of the
State.
(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. 
405. 
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 404(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 conduct 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
404(b)(1)(L) to use the unique identifiers assigned under
this section.
TITLE V—QUALITY ASSESSMENT
SEC. 501. AMERICAN HEALTH SECURITY QUALITY COUNCIL.
(a) ESTABLISHMENT.—There is hereby established
an American Health Security Quality Council (in this title
referred to as the ‘‘Council’’).
(b) DUTIES OF THE COUNCIL.—The Council shall
perform the following duties:
(1) PRACTICE GUIDELINES.—The Council shall
review and evaluate each practice guideline devel-
oped under part B of title IX of the Public Health
Service Act. The Council shall determine whether
the guideline should be recognized as a national
practice guideline to be used under section 204(d)
for purposes of determining payments under a State
health security program.
(2) STANDARDS
OF
QUALITY, PERFORMANCE
MEASURES, AND MEDICAL REVIEW CRITERIA.—The
Council shall review and evaluate each standard of
quality, performance measure, and medical review
criterion developed under part B of title IX of the
Public Health Service Act. The Council shall deter-
mine whether the standard, measure, or criterion is
appropriate for use in assessing or reviewing the
quality of services provided by State health security
programs, health care institutions, or health care
professionals.
(3) CRITERIA
FOR
ENTITIES
CONDUCTING
QUALITY REVIEWS.—The Council shall develop mini-
mum criteria for competence for entities that can
qualify to conduct ongoing and continuous external
quality review for State quality review programs
under section 503. Such criteria shall require such
an entity to be administratively independent of the
individual or board that administers the State health
security program and shall ensure that such entities
do not provide financial incentives to reviewers to
favor one pattern of practice over another. The
Council shall ensure coordination and reporting by
such entities to assure national consistency in qual-
ity standards.
(4) REPORTING.—The Council shall report to
the Board annually on the conduct of activities
under such title and shall report to the Board annu-
ally specifically on findings from outcomes research
and development of practice guidelines that may af-
fect the Board’s determination of coverage of serv-
ices under section 401(f)(1)(G).
(5) OTHER
FUNCTIONS.—The Council shall
perform the functions of the Council described in
sections 502 and 505.
(c) 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