Federal Employees Health Care Protection Act of 1998
PL 105-266 (H.R.1836), enacted 10/19/1998

PUBLIC LAW 105-266—OCT. 19, 1998 
112 STAT. 2363 
Public Law 105-266 
105th Congress 
An Act 
To amend chapter 89 of title 5, United States Code, to improve administration 
of sanctions against unfit health care providers under the Federal Employees 
Health Benefits Program, and for other purposes. 
Be it enacted by the Senate and House of Representatives of 
the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE. 
This Act may be cited as the "Federal Employees Health Care 
Protection Act of 1998". 
SEC. 2. DEBARMENT AND OTHER SANCTIONS. 
(a) AMENDMENTS.—Section 8902a of title 5, United States Code, 
is amended— 
(1) in subsection (a)— 
(A) in paragraph (1)— 
(i) by striking "and" at the end of subparagraph 
(B); 
(ii) by striking the period at the end of subpara-
graph (C) and inserting "; and"; and 
(iii) by adding at the end the following: 
"(D) the term 'should know' means that a person, with 
respect to information, acts in deliberate ignorance of, or in 
reckless disregard of, the truth or falsity of the information, 
and no proof of specific intent to defraud is required;"; and 
(B) in paragraph (2)(A), by striking "subsection (b) 
or (c)" and inserting "subsection (b), (c), or (d)"; 
(2) in subsection (b)— 
(A) by striking "The Office of Personnel Management 
may bar" and inserting "The Office of Personnel Manage-
ment shall bar"; and 
(B) by amending paragraph (5) to read as follows: 
"(5) Any provider that is currently debarred, suspended, 
or otherwise excluded from any procurement or nonprocurement 
activity (within the meaning of section 2455 of the Federal 
Acquisition Streamlining Act of 1994)."; 
tS) by redesignating subsections (c) through (i) as snh-
sections (d) through (j), respectively, and by inserting after 
subsection (b) the following: 
"(c) The Office may bar the following providers of health care 
services from participating in the program under this chapter: 
"(1) Any provider— 
"(A) whose license to provide health care services or 
supplies has been revoked, suspended, restricted, or not 
renewed, by a State licensing authority for reasons relating 
Oct. 19, 1998 
[H.R. 1836] 
Federal 
Employees 
Health Care 
Protection Act of 
1998. 
5 u s e 8901 note. 
112 STAT. 2364 
PUBLIC LAW 105-266—OCT. 19, 1998 
to the provider's professional competence, professional 
performance, or financial integrity; or 
"(B) that surrendered such a license while a formal 
disciplinary proceeding was pending before such an author-
ity, if the proceeding concerned the provider's professional 
competence, professional performance, or financial integ-
rity. 
"(2) Any provider that is an entity directly or indirectly 
owned, or with a control interest of 5 percent or more held, 
by an individual who has been convicted of any offense 
described in subsection (b), against whom a civil monetary 
penalty has been assessed under subsection (d), or who has 
been debarred from participation under this chapter. 
"(3) Any individual who directly or indirectly owns or has 
a control interest in a semctioned entity and who knows or 
should know of the action constituting the basis for the entity's 
conviction of any offense described in subsection (b), assessment 
with a civil monetary penalty under subsection (d), or debar-
ment from participation under this chapter. 
"(4) Any provider that the Office determines, in connection 
with claims presented under this chapter, has charged for 
health care services or supplies in an amount substantially 
in excess of such provider's customary charge for such services 
or supplies (unless the Office finds there is good cause for 
such charge), or charged for health care services or supplies 
which are substantially in excess of the needs of the covered 
individual or which are of a quality that fails to meet profes-
sionally recognized standards for such services or supplies. 
"(5) Any provider that the Office determines has committed 
acts described in subsection (d). 
Any determination under paragraph (4) relating to whether a charge 
for health care services or supplies is substantially in excess of 
the needs of the covered individual shall be made by trained review-
ers based on written medical protocols developed by physicians. 
In the event such a determination cannot be made based on such 
protocols, a physician in an appropriate specialty shall be con-
sulted."; 
(4) in subsection (d) (as so redesignated by paragraph (3)) 
by amending paragraph (1) to read as follows: 
"(1) in connection with claims presented under this chapter, 
that a provider has charged for a health care service or supply 
which the provider knows or should have known involves— 
"(A) an item or service not provided as claimed; 
"(B) charges in violation of applicable charge limita-
tions under section 8904(b); or 
"(C) an item or service furnished during a period in 
which the provider was debarred from participation under 
this chapter pursuant to a determination by the Office 
under this section, other than as permitted under sub-
section (g)(2)(B);"; 
(5) in subsection (f) (as so redesignated by paragraph (3)) 
by inserting after "under this section" the first place it appears 
the following: "(where such debarment is not mandatory)"; 
(6) in subsection (g) (as so redesignated by paragraph (3))— 
(A) by striking "(g)(1)" and all that follows through 
the end of paragraph (1) and inserting the following: 
PUBLIC LAW 105-266—OCT. 19, 1998 
112 STAT. 2365 
"(g)(1)(A) Except as provided in subparagraph (B), debarment Regulations. 
of a provider under subsection (b) or (c) shall be effective at such 
time and upon such reasonable notice to such provider, and to 
carriers and covered individuals, as shall be specified in regulations 
prescribed by the Office. Any such provider that is debarred from 
participation may request a hearing in accordance with subsection 
(h)(1). 
"(B) Unless the Office determines that the health or safety 
of individuals receiving health care services warrants an earlier 
effective date, the Office shall not make a determination adverse 
to a provider under subsection (c)(5) or (d) until such provider 
has been given reasonable notice and an opportunity for the deter-
mination to be made after a hearing as provided in accordance 
with subsection (h)(1)."; 
(B) in paragraph (3)— 
(i) by inserting "of debarment" after "notice"; and 
(ii) by adding at the end the following: "In the 
case of a debarment under paragraph (1), (2), (3), or 
(4) of subsection (b), the minimum period of debarment 
shall not be less than 3 years, except as provided 
in paragraph (4)(B)(ii)."; 
(C) in paragraph (4)(B)(i)(I) by striking "subsection 
(b) or (c)" and inserting "subsection (b), (c), or (d)"; and 
(D) by striking paragraph (6); 
(7) in subsection (h) (as so redesignated by paragraph (3)) 
by striking "(h)(1)" and all that follows through the end of 
paragraph (2) and inserting the following: 
"(h)(1) Any provider of health care services or supplies that 
is the subject of an adverse determination by the Office under 
this section shall be entitled to reasonable notice and an opportunity 
to request a hearing of record, and to judicial review as provided 
in this subsection after the (Office renders a final decision. The 
Office shall grant a request for a hearing upon a showing that 
due process rights have not previously been afforded with respect 
to any finding of fact which is relied upon as a cause for an 
adverse determination under this section. Such hearing shall be 
conducted without regard to subchapter II of chapter 5 and chapter 
7 of this title by a hearing officer who shall be designated by 
the Director of the Office and who shall not otherwise have been 
involved in the adverse determination being appealed. A request Regulation. 
for a hearing under this subsection shall be filed within such 
period and in accordaince with such procedures as the Office shall 
prescribe by regulation. 
"(2) Any provider adversely affected by a final decision under 
paragraph (1) made after a hearing to which such provider was 
a party may seek review of such decision in the United States 
District Court for the District of Columbia or for the district in 
which the plaintiff resides or has his or her principal place of 
business by filing a notice of appeal in such court within 60 days 
after the date the decision is issued, and by simultaneously sending 
copies of such notice by certified mail to the Director of the Office 
and to the Attorney General. In answer to the appeal, the Director Records, 
of the Office shall promptly file in such court a certified copy 
of the transcript of the record, if the Office conducted a hearing, 
and other evidence upon which the findings and decision complained 
of gu'e based. The court shall have power to enter, upon the plead- Courts, 
ings and evidence of record, a judgment affirming, modif3dng, or 
112 STAT. 2366 
PUBLIC LAW 105-266—OCT. 19, 1998 
5 use 8902a 
note. 
Applicability. 
setting aside, in whole or in part, the decision of the Office, with 
or without remanding the case for a rehearing. The district court 
shall not set aside or remand the decision of the Office unless 
there is not substantial evidence on the record, taken as whole, 
to support the findings by the Office of a cause for action under 
this section or unless action taken by the Office constitutes an 
abuse of discretion."; and 
(8>in subsection (i) (as so redesignated by paragraph (3))— 
/ 
(A) by striking "subsection (c)" and inserting "sub-
/ Section (d)"; and 
(B) by adding at the end the following: "The amount 
of a penalty or assessment as finally determined by the 
Office, or other amount the Office may agree to in com-
promise, may be deducted from any sum then or later 
owing by the United States to the party against whom 
the penalty or assessment has been levied.". 
(b) EFFECTIVE DATE.— 
(1) IN GENERAL.—^Except as provided in paragraph (2), the 
amendments made by this section shall take effect on the 
date of the enactment of this Act. 
(2) EXCEPTIONS.—(A) Paragraphs (2), (3), and (5) of section 
8902a(c) of title 5, United States Code, as amended by sub-
section (a)(3), shall apply only to the extent that the misconduct 
which is the basis for debarment under paragraph (2), (3), 
or (5), as applicable, occurs after the date of the enactment 
of this Act. 
(B) Paragraph (1)(B) of section 8902a(d) of title 5, United 
States Code, as amended by subsection (a)(4), shall apply only 
with respect to charges which violate section 8904(b) of such 
title for items or services furnished after the date of the enact-
ment of this Act. 
(C) Paragraph (3) of section 8902a(g) of title 5, United 
States Code, as amended by subsection (a)(6)(B), shall apply 
only with respect to debarments based on convictions occurring 
after the date of the enactment of this Act. 
SEC. 3. MISCELLANEOUS AMENDMENTS RELATING TO THE HEALTH 
BENEFITS PROGRAM FOR FEDERAL EMPLOYEES. 
(a) DEFINITION OF A CARRIER.—^Paragraph (7) of section 8901 
of title 5, United States Code, is amended by striking "organization;" 
and inserting "organization and an association of organizations 
or other entities described in this paragraph sponsoring a health 
benefits plan;". 
(b) SERVICE BENEFIT PLAN.—^Paragraph (1) of section 8903 of 
title 5, United States Code, is amended by striking "plan," and 
inserting "plan, which may be underwritten by participating affili-
ates licensed in any number of States,". 
(c) PREEMPTION.—Section 8902(m) of title 5, United States 
Code, is amended by striking "(m)(l)" and all that follows through 
the end of paragraph (1) and inserting the following: 
"(m)(l) The terms of any contract under this chapter which 
relate to the nature, provision, or extent of coverage or benefits 
(including pa3nnents with respect to benefits) shall supersede and 
preempt any State or local law, or any regulation issued thereunder, 
which relates to health insurance or plans.". 
PUBLIC LAW 105-266—OCT. 19, 1998 
112 STAT. 2367 
SEC. 4. CONTINUED HEALTH INSURANCE COVERAGE FOR CERTAIN 
5 USC 8901 note. 
INDIVIDUALS. 
(a) ENROLLMENT IN CHAPTER 89 PLAN.—For purposes of chapter 
89 of title 5, United States Code, any period of enrollment— 
(1) in a health benefits plan administered by the Federal 
Deposit Insurance Corporation before the termination of such 
plan on or before January 2, 1999; or 
(2) subject to subsection (c), in a health benefits plan (not 
under chapter 89 of such title) with respect to which the eligi-
bility of any employees or retired employees of the Board of 
Governors of the Federal Reserve System terminates on or 
before January 2, 1999, 
shall be deemed to be a period of enrollment in a health benefits 
plan under chapter 89 of such title. 
(b) CONTINUED COVERAGE.—(1) Subject to subsection (c), any 
individual who, on or before January 2, 1999, is enrolled in a 
health benefits plan described in subsection (a)(1) or (2) may enroll 
in an approved health benefits plan under chapter 89 of title 5, 
United States Code, either as an individual or for self and family, 
if, after taking into account the provisions of subsection (a), such 
individual— 
(A) meets the requirements of such chapter for eligibility 
to become so enrolled as £in employee, annuitant, or former 
spouse (within the meaning of such cnapter); or 
(B) would meet those requirements if, to the extent such 
requirements involve either retirement system under such title 
5, such individual satisfies similar requirements or provisions 
of the Retirement Plan for Employees of the Federal Reserve 
System. 
Any determination under subparagraph (B) shall be made under Guidelines. 
guidelines which the Office of Personnel Management shall estab-
lish in consultation with the Board of Governors of the Federal 
Reserve System. 
(2) Subject to subsection (c), any individual who, on or before 
January 2, 1999, is entitled to continued coverage under a health 
benefits plan described in subsection (a)(1) or (2) shall be deemed 
to be entitled to continued coverage under section 8905a of title 
5, United States Code, but only for the same remaining period 
as would have been allowable under the health benefits plan in 
which such individual was enrolled on or before January 2, 1999, 
if— 
(A) such individual had remained enrolled in such plan; 
and 
(B) such pl2in did not terminate, or the eligibility of such 
individual with respect to such plan did not terminate, as 
described in subsection (a). 
(3) Subject to subsection (c), any individual (other than an 
individual under paragraph (2)) who, on or before January 2, 1999, 
is covered under a health benefits plan described in subsection 
(a)(1) or (2) as an unmarried dependent child, but who does not 
then qualify for coverage under cnapter 89 of title 5, United States 
Code, as a family member (within the meaning of such chapter) 
shall be deemed to be entitled to continued coverage under section 
8905a of such title, to the same extent and in the same manner 
as if such individual had, on or before January 2, 1999, ceased 
to meet the requirements for being considered an unmarried 
dependent child of an enroUee under such chapter. 
112 STAT. 2368 
PUBLIC LAW 105-266—OCT. 19, 1998 
(4) Coverage under chapter 89 of title 5, United States Code, 
pursuant to an enrollment under this section shall become effective 
on January 3, 1999 or such earlier date as established by the 
Office of Personnel Management after consultation with the Federal 
Deposit Insurance Corporation or the Board of Governors of the 
Federal Reserve System, as appropriate. 
(c) ELIGIBILITY FOR F E H B P LIMITED TO INDIVIDUALS LOSING 
ELIGIBILITY UNDER FORMER HEALTH PLAN.—Nothing in subsection 
(a)(2) or any paragraph of subsection (b) (to the extent such para-
graph relates to tne plan described in subsection (a)(2)) shall be 
considered to apply with respect to any individual whose eligibility 
for coverage under such plan does not involuntarily terminate on 
or before January 2, 1999. 
(d) TRANSFERS TO THE EMPLOYEES HEALTH BENEFITS FUND.— 
The Federal Deposit Insurance Corporation and the Board of Gov-
ernors of the Federal Reserve System shall transfer to the Employ-
ees Health Benefits Fund under section 8909 of title 5, United 
States Code, amounts determined by the Director of the Office 
of Personnel Management, after consultation with the Federal 
Deposit Insurance Corporation and the Board of Governors of the 
Federal Reserve System, to be necessary to reimburse the Fund 
for the cost of providing benefits under this section not otherwise 
paid for by the individuals covered by this section. The amounts 
so transferred shall be held in the Fund and used by the Office 
of Personnel Management in addition to amounts available under 
section 8906(g)(1) of such title. 
(e) ADMINISTRATION AND REGULATIONS.—The Office of Person-
nel Management— 
(1) shall administer the provisions of this section to provide 
for— 
(A) a period of notice and open enrollment for individ-
uals affected by this section; and 
(B) no lapse of health coverage for individuals who 
enroll in a health benefits plan under chapter 89 of title 
5, United States Code, in accordance witn this section; 
and 
(2) may prescribe regulations to implement this section. 
5 use 8902 note. 
SEC. 5. FULL DISCLOSURE IN HEALTH PLAN CONTRACTS. 
The Office of Personnel Management shall encourage carriers 
offering health benefits plans described by section 8903 or section 
8903a of title 5, United States Code, with respect to contractual 
arrangements made by such carriers with any person for puiposes 
of obtaining discoimts firom providers for health care services or 
supplies furnished to individuals enrolled in such plan, to seek 
assurance that the conditions for such discounts are luUy disclosed 
to tiie providers who grant them. 
SEC. 6. PROVISIONS RELATING TO CERTAIN PLANS THAT HAVE 
DISCONTINUED THEIR PARTICIPATION IN FEHBP. 
(a) AUTHORITY TO READMIT.— 
(1) IN GENERAL.—Chapter 89 of title 5, United States Code, 
is amended by inserting after section 8903a the following: 
*
*
§ 8903b. Authority to readmit an employee organization plan 
"(a) In the event that a plan described by section 8903(3) 
or 8903a is discontinued under this chapter (other than in the 
circumstance described in section 8909(a)), that discontinuation 
PUBLIC LAW 105-266—OCT. 19, 1998 
112 STAT. 2369 
shall be disregarded, for purposes of any determination as to that 
plan's eligibility to be considered an approved plan under this 
chapter, but only for purposes of any contract year later than 
the third contract year beginning after such plan is so discontinued. 
"(b) A contract for a plan approved under this section shall 
require the carrier— 
"(1) to demonstrate experience in service delivery within 
a managed care system (including provider networks) through-
out the United States; and 
"(2) if the carrier involved would not otherwise be subject 
to the requirement set forth in section 8903a(c)(l), to satisfy 
such requirement.". 
(2) CONFORMING AMENDMENT.—^The analysis for chapter 
89 of title 5, United States Code, is amended by inserting 
after the item relating to section 8903a the following: 
"8903b. Authority to readmit an employee organization plan.". 
(3) APPLICABILITY.— 
5 use 8903b 
(A) IN GENERAL.—^The simendments made by this sub- i^ote. 
section shall apply as of the date of the enactment of 
this Act, including with respect to any plan which has 
been discontinued as of such oate. 
(B) TRANSITION RULE.—For purposes of applying sec-
tion 8903b(a) of title 5, United States Code (as amended 
by this subsection) with respect to any plan seeking to 
be readmitted for purposes oi any contract year beginning 
before January 1, 2000, such section shall be applied by 
substituting "second contract year" for "third contract year". 
(b) TREATMENT OP THE CONTINGENCY RESERVE OF A DISCON-
TINUED PLAN.— 
(1) IN GENERAL.—Subsection (e) of section 8909 of title 
5, United States Code, is amended by striking "(e)" and insert-
ing "(e)(1)" and by adding at the end the following: 
"(2) Any crediting required under paragraph (1) pursuant to 
the discontinuation of any plan under this chapter shall be com-
pleted by the end of the second contract year beginning after such 
plan is so discontinued. 
"(3) The Office shall prescribe regulations in accordance with RegvOatioiis. 
which this subsection shall be applied in the case of any plan Applicability. 
which is discontinued before being credited with the full amount 
to which it would otherwise be entitled based on the discontinuation 
of any other plan.". 
(2) TRANSITION RULE.—In the case of any amounts remain- 
5 use 8909 note. 
ing as of the date of the enactment of this Act in the contingency 
reserve of a discontinued plan, such amounts shall be disposed 
of in accordance with section 8909(e) of title 5, United States 
Code, as amended by this subsection, by— 
(A) the deadline set forth in section 8909(e) of such 
title (as so amended); or 
(B) if later, the end of the 6-month period beginning 
on such date of enactment. 
SEC. 7. MAXIMUM PHYSICIANS COMPARABILITY ALLOWANCE PAY-
ABLE. 
(a) IN GENERAL.—Paragraph (2) of section 5948(a) of title 5, 
United States Code, is amended by striking "$20,000" and inserting 
"$30,000". 
(b) AUTHORITY TO MODIFY EXISTING AGREEMENTS.— 
5 use 5948 note. 
112 STAT. 2370 
PUBLIC LAW 105-266—OCT. 19, 1998 
(1) IN GENERAL.—^Any service agreement under section 5948 
of title 5, United States Code, which is in effect on the date 
of the enactment of this Act may, with respect to any period 
of service remaining in such agreement, be modified based 
on the amendment made by subsection (a). 
(2) LIMITATION.—^A modification taking effect under this 
subsection in any year shall not cause an allowance to be 
increased to a rate which, if applied throughout such year, 
would cause the limitation under section 5948(a)(2) of such 
title (as amended by this section), or any other applicable 
limitation, to be exceeded. 
5 use 5948 note. 
(c) RuLE OF CONSTRUCTION.—^Nothing in this section shall be 
considered to authorize additional or supplemental appropriations 
for the fiscal year in which occurs the date of the enactment 
of this Act. 
SEC. 8. CLARIFICATION RELATING TO SECTION 8902(k). 
Section 8902(k) of title 5, United States Code, is amended— 
(1) by redesignating paragraph (2) as paragraph (3); and 
(2) by inserting after paragraph (1) the following: 
"(2) Nothing in this subsection shall be considered to preclude 
a health benefits plan from providing direct access or direct payment 
or reimbursement to a provider in a health care practice or profes-
sion other than a practice or profession listed in paragraph (1), 
if such provider is licensed or certified as such under Federal 
or State law.". 
Approved October 19, 1998. 
LEGISLATIVE HISTORY—H.R. 1836: 
HOUSE REPORTS: No. 105-374 (Comm. on Government Reform and Oversight). 
SENATE REPORTS: No. 105-257 (Comm. on Governmental Affairs). 
CONGRESSIONAL RECORD: 
Vol. 143 (1997): Nov. 4, considered and passed House. 
Vol. 144 (1998): Sept. 30, considered and passed Senate, amended. 
Oct. 5, House concurred in Senate amendments. 
WEEKLY COMPILATION OF PRESIDENTIAL DOCUMENTS, Vol. 34 (1998): 
Oct. 19, Presidential statement. 
PUBLIC LAW 105-266—OCT. 19, 1998 
112 STAT. 2369 
shall be disregarded, for purposes of any determination as to that 
plan's eligibility to be considered an approved plan under this 
chapter, but only for purposes of any contract year later than 
the third contract year beginning after such plan is so discontinued. 
"(b) A contract for a plan approved under this section shall 
require the carrier— 
"(1) to demonstrate experience in service delivery within 
a managed care system (including provider networks) through-
out the United States; and 
"(2) if the carrier involved would not otherwise be subject 
to the requirement set forth in section 8903a(c)(l), to satisfy 
such requirement.". 
(2) CONFORMING AMENDMENT.—^The analysis for chapter 
89 of title 5, United States Code, is amended by inserting 
after the item relating to section 8903a the following: 
"8903b. Authority to readmit an employee organization plan.". 
(3) APPLICABILITY.— 
5 use 8903b 
(A) IN GENERAL.—^The simendments made by this sub- i^ote. 
section shall apply as of the date of the enactment of 
this Act, including with respect to any plan which has 
been discontinued as of such oate. 
(B) TRANSITION RULE.—For purposes of applying sec-
tion 8903b(a) of title 5, United States Code (as amended 
by this subsection) with respect to any plan seeking to 
be readmitted for purposes oi any contract year beginning 
before January 1, 2000, such section shall be applied by 
substituting "second contract year" for "third contract year". 
(b) TREATMENT OP THE CONTINGENCY RESERVE OF A DISCON-
TINUED PLAN.— 
(1) IN GENERAL.—Subsection (e) of section 8909 of title 
5, United States Code, is amended by striking "(e)" and insert-
ing "(e)(1)" and by adding at the end the following: 
"(2) Any crediting required under paragraph (1) pursuant to 
the discontinuation of any plan under this chapter shall be com-
pleted by the end of the second contract year beginning after such 
plan is so discontinued. 
"(3) The Office shall prescribe regulations in accordance with RegvOatioiis. 
which this subsection shall be applied in the case of any plan Applicability. 
which is discontinued before being credited with the full amount 
to which it would otherwise be entitled based on the discontinuation 
of any other plan.". 
(2) TRANSITION RULE.—In the case of any amounts remain- 
5 use 8909 note. 
ing as of the date of the enactment of this Act in the contingency 
reserve of a discontinued plan, such amounts shall be disposed 
of in accordance with section 8909(e) of title 5, United States 
Code, as amended by this subsection, by— 
(A) the deadline set forth in section 8909(e) of such 
title (as so amended); or 
(B) if later, the end of the 6-month period beginning 
on such date of enactment. 
SEC. 7. MAXIMUM PHYSICIANS COMPARABILITY ALLOWANCE PAY-
ABLE. 
(a) IN GENERAL.—Paragraph (2) of section 5948(a) of title 5, 
United States Code, is amended by striking "$20,000" and inserting 
"$30,000". 
(b) AUTHORITY TO MODIFY EXISTING AGREEMENTS.— 
5 use 5948 note. 
112 STAT. 2370 
PUBLIC LAW 105-266—OCT. 19, 1998 
(1) IN GENERAL.—^Any service agreement under section 5948 
of title 5, United States Code, which is in effect on the date 
of the enactment of this Act may, with respect to any period 
of service remaining in such agreement, be modified based 
on the amendment made by subsection (a). 
(2) LIMITATION.—^A modification taking effect under this 
subsection in any year shall not cause an allowance to be 
increased to a rate which, if applied throughout such year, 
would cause the limitation under section 5948(a)(2) of such 
title (as amended by this section), or any other applicable 
limitation, to be exceeded. 
5 use 5948 note. 
(c) RuLE OF CONSTRUCTION.—^Nothing in this section shall be 
considered to authorize additional or supplemental appropriations 
for the fiscal year in which occurs the date of the enactment 
of this Act. 
SEC. 8. CLARIFICATION RELATING TO SECTION 8902(k). 
Section 8902(k) of title 5, United States Code, is amended— 
(1) by redesignating paragraph (2) as paragraph (3); and 
(2) by inserting after paragraph (1) the following: 
"(2) Nothing in this subsection shall be considered to preclude 
a health benefits plan from providing direct access or direct payment 
or reimbursement to a provider in a health care practice or profes-
sion other than a practice or profession listed in paragraph (1), 
if such provider is licensed or certified as such under Federal 
or State law.". 
Approved October 19, 1998. 
LEGISLATIVE HISTORY—H.R. 1836: 
HOUSE REPORTS: No. 105-374 (Comm. on Government Reform and Oversight). 
SENATE REPORTS: No. 105-257 (Comm. on Governmental Affairs). 
CONGRESSIONAL RECORD: 
Vol. 143 (1997): Nov. 4, considered and passed House. 
Vol. 144 (1998): Sept. 30, considered and passed Senate, amended. 
Oct. 5, House concurred in Senate amendments. 
WEEKLY COMPILATION OF PRESIDENTIAL DOCUMENTS, Vol. 34 (1998): 
Oct. 19, Presidential statement. 
PUBLIC LAW 105-267—OCT. 19, 1998 
112 STAT. 2371 
Public Law 105-267 
105th Congress 
An Act 
To direct the Secretary of Agriculture and the Secretary of the Interior to exchange 
land and other assets with Big Sky Lumber Co. and other entities. 
Be it enacted by the Senate and House of Representatives of 
the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE. 
This Act may be cited as the "Gallatin Land Consolidation 
Act of 1998". 
SEC. 2. FINDINGS. 
Congress finds that— 
(1) the land north of Yellowstone National Park possesses 
outstanding natural 
characteristics 
and 
wildlife 
habitats 
that make the land a valuable addition to the National Forest 
System; 
(2) it is in the interest of the United States to establish 
a logical and effective ownership pattern for the Gallatin 
National Forest, reducing long-term costs for taxpayers and 
increasing and improving public access to the forest; 
(3) it is in the interest of the United States for the Secretary 
of Agriculture to enter into an Option Agreement for the 
acquisition of land owned by Big Sky Lumber Co. to accomplish 
the purposes of this Act; and 
(4) other private property owners are willing to enter into 
exchanges that further improve the ownership pattern of the 
Gallatin National Forest. 
SEC. 3. DEFINITIONS. 
In this Act: 
(1) BLM LAND.—^The term "ELM land" means approxi-
mately 2,000 acres of Bureau of Land Management land (includ-
ing all appurtenances to the land) that is proposed to be 
acquired by BSL, as depicted in Exhibit B to the Option Agree-
ment. 
(2) BSL.—The term "BSL" means Big Sky Lumber Co., 
an Oregon joint venture, and its successors and assigns, and 
any other entities having a property interest in the BSL land. 
(3) BSL LAND.—^The term "BSL land" means approximately 
54,000 acres of land (including all appurtenances to the land 
except as provided in section 4(e)(l)(D)(i)) owned by BSL that 
is proposed to be acquired by the Secretary of Agriculture, 
as depicted in Exhibit A to the Option Agreement. 
Oct. 19, 1998 
[H.R. 3381] 
Gallatin Land 
ConsoUdation Act 
of 1998. 
Montana. 
112 STAT. 2372 
PUBLIC LAW 105-267—OCT. 19, 1998 
(4) EASTSIDE 
NATIONAL FORESTS.—The term "Eastside 
National Forests" means national forests east of the Continen-
tal Divide in the State of Montana, including the Beaverhead 
National Forest, Deerlodge National Forest, Helena National 
Forest, Custer National Forest, and Lewis and Clark National 
Forest. 
(5) NATIONAL FOREST SYSTEM LAND.—The term "National 
Forest System land" means approximately 29,000 acres of land 
(including all appurtenances to the land) owned by the United 
States in the Gallatin National Forest, Flathead National For-
est, Deerlodge National Forest, Helena National Forest, Lolo 
National Forest, and Lewis and Clark National Forest that 
is proposed to be acquired by BSL, as depicted in Exhibit 
B to the Option Agreement. 
(6) OPTION AGREEMENT.—^The term "Option Agreement" 
means— 
(A) the document signed by BSL, dated July 29, 1998, 
and entitled "Option Agreement for the Acquisition of Big 
Sky Lumber Co. Lands Pursuant to the Gallatin Range 
Consolidation and Protection Act of 1993"; 
(B) the exhibits and maps attached to the document 
described in subparagraph (A); and 
(C) an exchange agreement to be entered into between 
the Secretary and BSL and made part of the document 
described in subparagraph (A). 
(7) SECRETARY.—The "Secretary" means the Secretary of 
Agriculture. 
SEC. 4. GALLATIN LAND CONSOLIDATION COMPLETION. 
(a) IN GENERAL.—Notwithstanding any other provision of law, 
and subject to the terms and conditions of the Option Agreement— 
(1) if BSL offers title acceptable to the Secretary to the 
BSL land— 
(A) the Secretary shall accept a warranty deed to the 
BSL land and a quit claim deed to agreed to mineral 
interests in the BSL land; 
(B) the Secretary shall convey to BSL, subject to valid 
existing rights and to other terms, conditions, reservations, 
and exceptions as may be agreed to by the Secretary and 
BSL, fee title to the National Forest System land; and 
(C) the Secretary of the Interior shall convey to BSL, 
by patent or otherwise, subject to valid existing rights 
and other terms, conditions, reservations, and exceptions 
as may be agreed to by the Secretary of the Interior and 
BSL, fee title to the BLM land; 
(2) if BSL places title in escrow acceptable to the Secretary 
to IIV2 sections of the BSL land in the Taylor Fork area 
as set forth in the Option Agreement— 
(A) the Secretary shall place Federal land in the Bang-
tail and Doe Creek areas of the Gallatin National Forest, 
as identified in the Option Agreement, in escrow pending 
conveyance to the Secretary of the Taylor Fork land, as 
identified in the Option Agreement in escrow; 
(B) the Secretary, subject to the availability of funds, 
shall purchase IVT. sections of BSL land in the Taylor 
Fork area held in escrow and identified in the Option 
Agreement at a purchase price of $4,150,000; and 
PUBLIC LAW 105-267—OCT. 19, 1998 
112 STAT. 2373 
(C) the Secretary shall acquire the 4 Taylor Fork sec-
tions identified in the Option Agreement remaining in 
escrow, and any of the 6 sections referred to in subpara-
graph (B) for which funds are not available, by providing 
BSL with timber sale receipts from timber sales on the 
Gallatin National Forest and other eastside national forests 
in the State of Montana in accordance with subsection 
(c); and 
(3)(A) as funds or timber sale receipts are received by 
B S I ^ 
(i) the deeds to an equivalent value of BSL Taylor 
Fork land held in escrow shall be released and conveyed 
to the Secretary; and 
(ii) the escrow of deeds to an equivalent value of 
Federal land shall be released to the Secretary in accord-
ance with the terms of the Option Agreement; or 
(B) if funds or timber sale receipts are not provided to 
BSL as provided in the Option Agreement, BSL shall be entitled 
to receive patents and deeds to an equivalent value of the 
Federal land held in escrow. 
(b) VALUATION.— 
(1) IN GENERAL.—The property and other assets exchanged 
or conveyed by BSL and the United States under subsection 
(a) shall be approximately equal in value, as determined by 
the Secretary. 
(2) DIFFERENCE IN VALUE.—^To the extent that the property 
and other assets exchanged or conveyed by BSL or the United 
States under subsection (a) are not approximately equal in 
value, as determined by the Secretary, the values shall be 
equalized in accordance with methods identified in the Option 
Agreement. 
(c) TIMBER SALE PROGRAM.— 
(1) IN GENERAL.—^The Secretary shall implement a timber 
sale program, according to the terms and conditions identified 
in the Option Agreement and subject to compliance with 
applicable environmental laws (including regulations), judicial 
decisions, memoranda of understanding, small business set-
aside rules, and acts beyond the control of the Secretary, to 
generate sufficient timber receipts to purchase the portions 
of the BSL land in Taylor Fork identified in the Option Agree-
ment. 
(2) IMPLEMENTATION.—In implementing the timber sale 
program— 
(A) the Secretary shall provide BSL with a proposed 
annual schedule of timber sales; 
(B) as set forth in the Option Agreement, receipts 
generated from the timber sale program shall be deposited 
by the Secretary in a special account established by the 
Secretary and paid by the Secretary to BSL; 
(C) receipts from the Gallatin National Forest shall 
not be subject to the Act of May 23, 1908 (16 U.S.C. 
500); and 
'
^
^ 
(D) the Secretary shall fund the timber sale program 
' at levels determined by the Secretary to be commensurate 
with the preparation and administration of the identified 
timber sale program. 
(d) RIGHTS-OF-WAY.—^As specified in the Option Agreement— 
112 STAT. 2374 
PUBLIC LAW 105-267—OCT. 19, 1998 
(1) the Secretary, under the authority of the Federal Land 
Policy and Management Act of 1976 (43 U.S.C. 1701 et seq.), 
shall convey to BSL such easements in or other rights-of-
way over National Forest System land for access to the land 
acquired by BSL under this Act for all lawful purposes; and 
(2) BSL shall convey to the United States such easements 
in or other rights-of-way over land owned by BSL for all lawful 
purposes, as may be agreed to by the Secretary and BSL. 
(e) QUALITY OF TITLE.— 
(1) DETERMlNATlON.^The Secretary shall review the title 
for the BSL land described in subsection (a) and, within 45 
days after receipt of all applicable title documents from BSL, 
determine whether— 
(A) the applicable title standards for Federal land 
acquisition have been satisfied and the quality of the title 
is otherwise acceptable to the Secretary of Agriculture; 
(B) all draft conveyances and closing documents have 
been received and approved; 
(C) a current title commitment verifying compliance 
with applicable title standards has been issued to the Sec-
retary; and 
(D) the title includes both the surface and subsurface 
estates without reservation or exception (except as specifi-
cally provided in this Act), including— 
(i) minerals, mineral rights, and mineral interests 
(including severed oil and gas surface rights), subject 
to and excepting other outstanding or reserved oil and 
gas rights; 
(ii) timber, timber rights, and timber interests 
(except those reserved subject to section 251.14 of title 
36, Code of Federal Regulations, by BSL and agreed 
to by the Secretary); 
(iii) water, water rights, ditch, and ditch rights; 
(iv) geothermal rights; and 
(v) any other interest in the property. 
(2) CONVEYANCE OF TITLE.— 
(A) IN GENERAL.—If the quality of title does not meet 
Federal stEindards or is otherwise determined to be 
unacceptable to the Secretary of Agriculture, the Secretary 
shall advise BSL regarding corrective actions necessary 
to make an affirmative determination under paragraph 
(1). 
(B) TITLE TO SUBSURFACE ESTATE.—^Title to the sub-
surface estate shall be conveyed by BSL to the Secretary 
in the same form and content as that estate is received 
by BSL from Burlington Resources Oil & Gas Company 
Inc. and Glacier Park Compsmy. 
(f) TIMING OF IMPLEMENTATION.— 
Deadlines. 
(1) LAND-FOR-LAND EXCHANGE.—^The Secretary shall accept 
the conveyance of land described in subsection (a) not later 
than 45 days after the Secretary has made an affirmative 
determination of quality of title. 
(2) 
LAND-FOR-TIMBER 
SALE 
RECEIPT 
EXCHANGE.—As 
provided in subsection (c) and the Option Agreement, the Sec-
retary shall make timber receipts described in subsection (a)(3) 
available not later than December 31 of the fifth full calendar 
year that begins after the date of the enactment of this Act. 
PUBLIC LAW 105-267—OCT. 19, 1998 
112 STAT. 2375 
(3) PURCHASE.—^The Secretary shall complete the purchase 
of BSL land under subsection (a)(2)(B) not later than 30 days 
after the date on which funds are made available for such 
purchase and an aftlrmative determination of quality of title 
is made with respect to the BSL land. 
SEC. 5. OTHER FACIUTATED EXCHANGES. 
(a) AUTHORIZED EXCHANGES.— 
(1) IN GENERAL.—The Secretary shall enter into the 
following land exchanges if the landowners are willing: 
(A) Wapiti land exchange, as outlined in the documents 
entitled "Non-Federal Lands in Facilitated Exchanges" and 
"Federal Lands in Facilitated Exchanges" and dated July 
1998. 
(B) Eightmile/West Pine land exchange as outlined 
in the documents entitled "Non-Federal Lands in Facili-
tated Exchanges" and "Federal Lands in Facilitated 
Exchanges" and dated July 1998. 
(2) EQUAL VALUE.—Before entering into an exchange under 
paragraph (1), the Secretary shall determine that the parcels 
of land to be exchanged are of approximately equal value, 
based on an appraisal. 
(b) SECTION ONE OF THE TAYLOR FORK LAND.— 
(1) IN GENERAL.—^The Secretary is encouraged to pursue 
a land exchange with the owner of section 1 of the Taylor 
Fork land after completing a full public process and an 
appraisal. 
(2) REPORT.—^The Secretary shall report to Congress on Deadline, 
the implementation of paragraph (1) not later than 180 days 
after the date of the enactment of this Act. 
SEC. 6. GENERAL PROVISIONS. 
(a) MINOR CORRECTIONS.— 
(1) IN GENERAL.—^The Option Agreement shall be subject 
to such minor corrections and supplemental provisions as may 
be agreed to by the Secretary and BSL. 
(2) NOTIFICATION.—The Secretary shall notify the Commit-
tee on Energy and Natural Resources of the Senate, the 
Committee on Resources of the House of Representatives, and 
each member of the Montana congressional delegation of any 
changes made under this subsection. 
(3) BOUNDARY ADJUSTMENT.— 
(A) IN GENERAL.—The boundary of the Gallatin 
National Forest is adjusted in the Wineglass and North 
Bridger area, as described on maps dated July 1998, upon 
completion of the conveyances. 
(B) No LIMITATION.—^Nothing in this subsection limits 
the authority of the Secretary to adjust the boundary pursu-
ant to section 11 of the Act of March 1, 1911 (commonly 
known as the "Weeks Act"; 16 U.S.C. 521). 
(C) ALLOCATION OF LAND AND WATER CONSERVATION 
FUND MONEYS.—For the purposes of section 7 of the Land 
and Water Conservation Fund Act of 1965 (16 U.S.C. 4601-
9), boundaries of the Gallatin National Forest shall be 
considered to be the boundaries of the National Forest 
as of January 1, 1965. 
(b) PUBLIC AVAILABILITY.—^The Option Agreement— 
58-194 O - 98 - 18: QL 3 Part 3