115
may require that bills for services for which payment
may be made under this section, or for any class of
such services, be submitted electronically.
(b) PAYMENT RATES BASED ON NEGOTIATED PRO-
SPECTIVE FEE SCHEDULES.—With respect to any pay-
ment method for a class of services of practitioners, the
State health security program shall establish, on a pro-
spective basis, a payment schedule. The State health secu-
rity program may establish such a schedule after negotia-
tions with organizations representing the practitioners in-
volved. Such fee schedules shall be designed to provide in-
centives for practitioners to choose primary care medicine,
including general internal medicine and pediatrics, over
medical specialization. Nothing in this section shall be con-
strued as preventing a State from adjusting the payment
schedule amounts on a quarterly or other periodic basis
depending on whether expenditures under the schedule will
exceed the budgeted amount with respect to such expendi-
tures.
(c) BILLABLE COVERED SERVICE DEFINED.—In this
section, the term ‘‘billable covered service’’ means a service
covered under section 201 for which a practitioner is enti-
tled to compensation by payment of a fee determined
under this section.
116
SEC. 613. PAYMENTS TO COMPREHENSIVE HEALTH SERV-
ICE ORGANIZATIONS.
(a) IN GENERAL.—Payment under a State health se-
curity program to a comprehensive health service organi-
zation to its enrollees shall be determined by the State—
(1) based on a global budget described in sec-
tion 611, or
(2) based on the basic capitation amount de-
scribed in subsection (b) for each of its enrollees.
(b) BASIC CAPITATION AMOUNT.—
(1) IN GENERAL.—The basic capitation amount
described in this subsection for an enrollee shall be
determined by the State health security program on
the basis of the average amount of expenditures that
is estimated would be made under the State health
security program for covered health care services for
an enrollee, based on actuarial characteristics (as de-
fined by the State health security program).
(2) 
ADJUSTMENT
FOR
SPECIAL
HEALTH
NEEDS.—The State health security program shall
adjust such average amounts to take into account
the special health needs, including a disproportionate
number of medically underserved individuals, of pop-
ulations served by the organization.
(3) ADJUSTMENT
FOR
SERVICES
NOT
PRO-
VIDED.—The State health security program shall ad-
117
just such average amounts to take into account the
cost of covered health care services that are not pro-
vided by the comprehensive health service organiza-
tion under section 303(a).
SEC. 614. PAYMENTS FOR COMMUNITY-BASED PRIMARY
HEALTH SERVICES.
(a) IN GENERAL.—In the case of community-based
primary health services, subject to subsection (b), pay-
ments under a State health security program shall—
(1) be based on a global budget described in
section 611,
(2) be based on the basic primary care capita-
tion amount described in subsection (c) for each in-
dividual enrolled with the provider of such services,
or
(3) be made on a fee-for-service basis under
section 612.
(b) PAYMENT ADJUSTMENT.—Payments under sub-
section (a) may include, consistent with the budgets devel-
oped under this title—
(1) an additional amount, as set by the State
health security program, to cover the costs incurred
by a provider which serves persons not covered by
this Act whose health care is essential to overall
community health and the control of communicable
118
disease, and for whom the cost of such care is other-
wise uncompensated,
(2) an additional amount, as set by the State
health security program, to cover the reasonable
costs incurred by a provider that furnishes case
management 
services 
(as 
defined 
in 
section
1915(g)(2) of the Social Security Act), transpor-
tation services, and translation services, and
(3) an additional amount, as set by the State
health security program, to cover the costs incurred
by a provider in conducting health professional edu-
cation programs in connection with the provision of
such services.
(c) BASIC PRIMARY CARE CAPITATION AMOUNT.—
(1) IN GENERAL.—The basic primary care capi-
tation amount described in this subsection for an en-
rollee with a provider of community-based primary
health services shall be determined by the State
health security program on the basis of the average
amount of expenditures that is estimated would be
made under the State health security program for
such an enrollee, based on actuarial characteristics
(as defined by the State health security program).
(2) 
ADJUSTMENT
FOR
SPECIAL
HEALTH
NEEDS.—The State health security program shall
119
adjust such average amounts to take into account
the special health needs, including a disproportionate
number of medically underserved individuals, of pop-
ulations served by the provider.
(3) ADJUSTMENT
FOR
SERVICES
NOT
PRO-
VIDED.—The State health security program shall ad-
just such average amounts to take into account the
cost of community-based primary health services
that are not provided by the provider.
(d) COMMUNITY-BASED PRIMARY HEALTH SERVICES
DEFINED.—In this section, the term ‘‘community-based
primary health services’’ has the meaning given such term
in section 202(a).
SEC. 615. PAYMENTS FOR PRESCRIPTION DRUGS.
(a) ESTABLISHMENT OF LIST.—
(1) IN GENERAL.—The Board shall establish a
list of approved prescription drugs and biologicals
that the Board determines are necessary for the
maintenance or restoration of health or of employ-
ability or self-management and eligible for coverage
under this Act.
(2) EXCLUSIONS.—The Board may exclude re-
imbursement under this Act for ineffective, unsafe,
or over-priced products where better alternatives are
determined to be available.
120
(b) PRICES.—For each such listed prescription drug
or biological covered under this Act, for insulin, and for
medical foods, the Board shall from time to time deter-
mine a product price or prices which shall constitute the
maximum to be recognized under this Act as the cost of
a drug to a provider thereof. The Board may conduct ne-
gotiations, on behalf of State health security programs,
with product manufacturers and distributors in deter-
mining the applicable product price or prices.
(c) CHARGES
BY INDEPENDENT PHARMACIES.—
Each State health security program shall provide for pay-
ment for a prescription drug or biological or insulin fur-
nished by an independent pharmacy based on the drug’s
cost to the pharmacy (not in excess of the applicable prod-
uct price established under subsection (b)) plus a dis-
pensing fee. In accordance with standards established by
the Board, each State health security program, after con-
sultation with representatives of the pharmaceutical pro-
fession, shall establish schedules of dispensing fees, de-
signed to afford reasonable compensation to independent
pharmacies after taking into account variations in their
cost of operation resulting from regional differences, dif-
ferences in the volume of prescription drugs dispensed, dif-
ferences in services provided, the need to maintain expend-