<num style="-uslm-dtd:enum" value="XIII">TITLE XIII—</num><heading style="-uslm-dtd:header">HEALTH MAINTENANCE ORGANIZATIONS </heading> <section style="-uslm-dtd:section" identifier="/us/sComp/78/373/tXIII/s1301" styleType="traditional"> <heading style="-uslm-dtd:header">requirements for health maintenance organizations </heading> <num style="-uslm-dtd:enum" value="1301">Sec. 1301. </num><editorialNote style="-uslm-dtd:usc-reference" role="uscRef"><b>[</b>300e<b>]</b> </editorialNote><subsection style="-uslm-dtd:subsection" identifier="/us/sComp/78/373/tXIII/s1301/a" styleType="OLC" class="inline"><num style="-uslm-dtd:enum" value="a">(a) </num><content style="-uslm-dtd:text">For purposes of this title, the term “<term style="-uslm-dtd:term">health maintenance organization</term>” means a public or private entity which is organized under the laws of any State and which (1) provides basic and supplemental health services to its members in the manner prescribed by subsection (b), and (2) is organized and operated in the manner prescribed by subsection (c).</content></subsection> <subsection style="-uslm-dtd:subsection" identifier="/us/sComp/78/373/tXIII/s1301/b" styleType="OLC"> <num style="-uslm-dtd:enum" value="b">(b) </num><chapeau style="-uslm-dtd:text">A health maintenance organization shall provide, without limitations as to time or cost other than those prescribed by or under this title, basic and supplemental health services to its members in the following manner:</chapeau> <paragraph style="-uslm-dtd:paragraph" identifier="/us/sComp/78/373/tXIII/s1301/b/1" styleType="OLC"> <num style="-uslm-dtd:enum" value="1">(1) </num><content style="-uslm-dtd:text">Each member is to be provided basic health services for a basic health services payment which (A) is to be paid on a periodic basis without regard to the dates health services (within the basic health services) are provided; (B) is fixed without regard to the frequency, extent, or kind of health service (within the basic health services) actually furnished; (C) except in the case of basic health services provided a member who is a full-time student (as defined by the Secretary) at an accredited institution of higher education, is fixed under a community rating system; and (D) may be supplemented by additional nominal payments which may be required for the provision of specific services (within the basic health services), except that such payments may not be required where or in such a manner that they serve (as determined under regulations of the Secretary) as a barrier to the delivery of health services. Such additional nominal payments shall be fixed in accordance with the regulations of the Secretary. If a health maintenance organization offers to its members the opportunity to obtain basic health services through a physician not described in subsection (b)(3)(A), the organization may require, in addition to payments described in clause (D) of this paragraph, a reasonable deductible to be paid by a member when obtaining a basic health service from such a physician. A health maintenance organization may include a health service, defined as a supplemental health service by section 1302(2), in the basic health services provided its members for a basic health services payment described in the first sentence. In the case of an entity which before it became a qualified health maintenance organization (within the meaning of section 1310(d)) provided comprehensive health services on a prepaid basis, the requirement of clause (C) shall not apply to such entity until the expiration of the forty-eight month period beginning with the month following the month in which the entity became such a qualified health organization. The requirements of this paragraph respecting the basic health services payment shall not apply to the provision of basic health services to a member for an illness or injury for which the member is entitled to benefits under a workmen's compensation law or an insurance policy but only to the extent such benefits apply to such services. For the provision of such services for an illness or injury for which a member is entitled to benefits under such a law, the health maintenance organization may, if authorized by such law, charge or authorize the provider of such services to charge, in accordance with the charges allowed under such law, the insurance carrier, employer, or other entity which under such law is to pay for the provision of such services or, to the extent that such member has been paid under such law for such services, such member. For the provision of such services for an illness or injury for which a member is entitled to benefits under an insurance policy, a health maintenance organization may charge or authorize the provider of such services to charge the insurance carrier under such policy or, to the extent that such member has been paid under such policy for such services, such member.</content> </paragraph> <paragraph style="-uslm-dtd:paragraph" identifier="/us/sComp/78/373/tXIII/s1301/b/2" styleType="OLC"> <num style="-uslm-dtd:enum" value="2">(2) </num><content style="-uslm-dtd:text">For such payment or payments (hereinafter in this title referred to as “<quotedText style="-uslm-dtd:quote">supplemental health services payments</quotedText>”) as the health maintenance organization may require in addition to the basic health services payment, the organization may provide to each of its members any of the health services which are included in supplemental health services (as defined in section 1302(2)). Supplemental health services payments which are fixed on a prepayment basis shall be fixed under a community rating system unless the supplemental health services payment is for a supplemental health service provided a member who is a full-time student (as defined by the Secretary) at an accredited institution of higher education, except that, in the case of an entity which before it became a qualified health maintenance organization (within the meaning of section 1310(d)) provided comprehensive health services on a prepaid basis, the requirement of this sentence shall not apply to such entity during the forty-eight month period beginning with the month following the month in which the entity became such a qualified health maintenance organization.</content> </paragraph> <paragraph style="-uslm-dtd:paragraph" identifier="/us/sComp/78/373/tXIII/s1301/b/3" styleType="OLC"> <num style="-uslm-dtd:enum" value="3">(3)</num><subparagraph style="-uslm-dtd:subparagraph" identifier="/us/sComp/78/373/tXIII/s1301/b/3/A" styleType="OLC" class="inline"><num style="-uslm-dtd:enum" value="A">(A) </num><chapeau style="-uslm-dtd:text">Except as provided in subparagraph (B), at least 90 percent of the services of a physician which are provided as basic health services shall be provided through—</chapeau> <clause style="-uslm-dtd:clause" identifier="/us/sComp/78/373/tXIII/s1301/b/3/A/i" styleType="OLC" class="leftIndentDecrease1"> <num style="-uslm-dtd:enum" value="i">(i) </num><content style="-uslm-dtd:text">members of the staff of the health maintenance organization,</content> </clause> <clause style="-uslm-dtd:clause" identifier="/us/sComp/78/373/tXIII/s1301/b/3/A/ii" styleType="OLC" class="leftIndentDecrease1"> <num style="-uslm-dtd:enum" value="ii">(ii) </num><content style="-uslm-dtd:text">a medical group (or groups),</content> </clause> <clause style="-uslm-dtd:clause" identifier="/us/sComp/78/373/tXIII/s1301/b/3/A/iii" styleType="OLC" class="leftIndentDecrease1"> <num style="-uslm-dtd:enum" value="iii">(iii) </num><content style="-uslm-dtd:text">an individual practice association (or associations),</content> </clause> <clause style="-uslm-dtd:clause" identifier="/us/sComp/78/373/tXIII/s1301/b/3/A/iv" styleType="OLC" class="leftIndentDecrease1"> <num style="-uslm-dtd:enum" value="iv">(iv) </num><content style="-uslm-dtd:text">physicians or other health professionals who have contracted with the health maintenance organization for the provision of such services, or</content> </clause> <clause style="-uslm-dtd:clause" identifier="/us/sComp/78/373/tXIII/s1301/b/3/A/v" styleType="OLC" class="leftIndentDecrease1"> <num style="-uslm-dtd:enum" value="v">(v) </num><content style="-uslm-dtd:text">any combination of such staff, medical group (or groups), individual practice association (or associations) or physicians or other health professionals under contract with the organization.</content> </clause></subparagraph> <subparagraph style="-uslm-dtd:subparagraph" identifier="/us/sComp/78/373/tXIII/s1301/b/3/B" styleType="OLC" class="leftIndentDecrease1"> <num style="-uslm-dtd:enum" value="B">(B) </num><chapeau style="-uslm-dtd:text">Subparagraph (A) does not apply to the provision of the services of a physician—</chapeau> <clause style="-uslm-dtd:clause" identifier="/us/sComp/78/373/tXIII/s1301/b/3/B/i" styleType="OLC" class="leftIndentDecrease1"> <num style="-uslm-dtd:enum" value="i">(i) </num><content style="-uslm-dtd:text">which the health maintenance organization determines, in conformity with regulations of the Secretary, are unusual or infrequently used, or</content> </clause> <clause style="-uslm-dtd:clause" identifier="/us/sComp/78/373/tXIII/s1301/b/3/B/ii" styleType="OLC" class="leftIndentDecrease1"> <num style="-uslm-dtd:enum" value="ii">(ii) </num><content style="-uslm-dtd:text">which are provided a member of the organization in a manner other than that prescribed by subparagraph (A) because of an emergency which made it medically necessary that the service be provided to the member before it could be provided in a manner prescribed by subparagraph (A).</content> </clause> </subparagraph> <subparagraph style="-uslm-dtd:subparagraph" identifier="/us/sComp/78/373/tXIII/s1301/b/3/C" styleType="OLC" class="leftIndentDecrease1"> <num style="-uslm-dtd:enum" value="C">(C) </num><content style="-uslm-dtd:text">Contracts between a health maintenance organization and health professionals for the provision of basic and supplemental health services shall include such provisions as the Secretary may require (including provisions requiring appropriate continuing education).</content> </subparagraph> <subparagraph style="-uslm-dtd:subparagraph" identifier="/us/sComp/78/373/tXIII/s1301/b/3/D" styleType="OLC" class="leftIndentDecrease1"> <num style="-uslm-dtd:enum" value="D">(D) </num><content style="-uslm-dtd:text">Contracts between a health maintenance organization and health professionals for the provision of basic and supplemental health services shall include such provisions as the Secretary may require, but only to the extent that such requirements are designed to insure the delivery of quality health care services and sound fiscal management.</content> </subparagraph> </paragraph> <paragraph style="-uslm-dtd:paragraph" identifier="/us/sComp/78/373/tXIII/s1301/b/4" styleType="OLC"> <num style="-uslm-dtd:enum" value="4">(4) </num><content style="-uslm-dtd:text">Basic health services (and only such supplemental health services as members have contracted for) shall within the area served by the health maintenance organization be available and accessible to each of its members with reasonable promptness and in a manner which assures continuity, and when medically necessary be available and accessible twenty-four hours a day and seven days a week, except that a health maintenance organization which has a service area located wholly in a nonmetropolitan area may make a basic health service available outside its service area if that basic health service is not a primary care or emergency health care service and if there is an insufficient number of providers of that basic health service within the service area who will provide such service to members of the health maintenance organization. A member of a health maintenance organization shall be reimbursed by the organization for his expenses in securing basic and supplemental health services other than through the organization if the services were medically necessary and immediately required because of an unforeseen illness, injury, or condition.</content> </paragraph> <paragraph style="-uslm-dtd:paragraph" identifier="/us/sComp/78/373/tXIII/s1301/b/5" styleType="OLC"> <num style="-uslm-dtd:enum" value="5">(5) </num><content style="-uslm-dtd:text">To the extent that a natural disaster, war, riot, civil insurrection, or any other similar event not within the control of a health maintenance organization (as determined under regulations of the Secretary) results in the facilities, personnel, or financial resources of a health maintenance organization not being available to provide or arrange for the provision of a basic or supplemental health service in accordance with the requirements of paragraphs (1) through (4) of this subsection, such requirements only require the organization to make a good-faith effort to provide or arrange for the provision of such service within such limitation on its facilities, personnel, or resources.</content> </paragraph> <paragraph style="-uslm-dtd:paragraph" identifier="/us/sComp/78/373/tXIII/s1301/b/6" styleType="OLC"> <num style="-uslm-dtd:enum" value="6">(6) </num><content style="-uslm-dtd:text">A health maintenance organization that otherwise meets the requirements of this title may offer a high-deductible health plan (as defined in section 220(c)(2) of the Internal Revenue Code of 1986).</content> </paragraph> </subsection> <subsection style="-uslm-dtd:subsection" identifier="/us/sComp/78/373/tXIII/s1301/c" styleType="OLC"> <num style="-uslm-dtd:enum" value="c">(c) </num><chapeau style="-uslm-dtd:text">Each health maintenance organization shall—</chapeau> <paragraph style="-uslm-dtd:paragraph" identifier="/us/sComp/78/373/tXIII/s1301/c/1" styleType="OLC"> <num style="-uslm-dtd:enum" value="1">(1)</num><subparagraph style="-uslm-dtd:subparagraph" identifier="/us/sComp/78/373/tXIII/s1301/c/1/A" styleType="OLC" class="inline"><num style="-uslm-dtd:enum" value="A">(A) </num><chapeau style="-uslm-dtd:text">have—</chapeau> <clause style="-uslm-dtd:clause" identifier="/us/sComp/78/373/tXIII/s1301/c/1/A/i" styleType="OLC" class="leftIndentDecrease1"> <num style="-uslm-dtd:enum" value="i">(i) </num><content style="-uslm-dtd:text">a fiscally sound operation, and</content> </clause> <clause style="-uslm-dtd:clause" identifier="/us/sComp/78/373/tXIII/s1301/c/1/A/ii" styleType="OLC" class="leftIndentDecrease1"> <num style="-uslm-dtd:enum" value="ii">(ii) </num><content style="-uslm-dtd:text">adequate provision against the risk of insolvency,</content> </clause><continuation style="-uslm-dtd:continuation-text" role="subparagraph">which is satisfactory to the Secretary, and (B) have administrative and managerial arrangements satisfactory to the Secretary;</continuation></subparagraph> </paragraph> <paragraph style="-uslm-dtd:paragraph" identifier="/us/sComp/78/373/tXIII/s1301/c/2" styleType="OLC"> <num style="-uslm-dtd:enum" value="2">(2) </num><content style="-uslm-dtd:text">assume full financial risk on a prospective basis for the provision of basic health services, except that a health maintenance organization may (A) obtain insurance or make other arrangements for the cost of providing to any member basic health services the aggregate value of which exceeds $5,000 in any year, (B) obtain insurance or make other arrangements for the cost of basic health services provided to its members other than through the organization because medical necessity required their provision before they could be secured through the organization, (C) obtain insurance or make other arrangements for not more than 90 per centum of the amount by which its costs for any of its fiscal years exceed 115 per centum of its income for such fiscal year, and (D) make arrangements with physicians or other health professionals, health care institutions, or any combination of such individuals or institutions to assume all or part of the financial risk on a prospective basis for the provision of basic health services by the physicians or other health professionals or through the institutions;</content> </paragraph> <paragraph style="-uslm-dtd:paragraph" identifier="/us/sComp/78/373/tXIII/s1301/c/3" styleType="OLC"> <num style="-uslm-dtd:enum" value="3">(3)</num><subparagraph style="-uslm-dtd:subparagraph" identifier="/us/sComp/78/373/tXIII/s1301/c/3/A" styleType="OLC" class="inline"><num style="-uslm-dtd:enum" value="A">(A) </num><content style="-uslm-dtd:text">enroll persons who are broadly representative of the various age, social, and income groups within the area it serves, except that in the case of a health maintenance organization which has a medically underserved population located (in whole or in part) in the area it serves, not more than 75 per centum of the members of that organization may be enrolled from the medically underserved population unless the area in which such population resides is also a rural area (as designated by the Secretary), and (B) carry out enrollment of members who are entitled to medical assistance under a State plan approved under title XIX of the Social Security Act in accordance with procedures approved under regulations promulgated by the Secretary;</content></subparagraph> </paragraph> <paragraph style="-uslm-dtd:paragraph" identifier="/us/sComp/78/373/tXIII/s1301/c/4" styleType="OLC"> <num style="-uslm-dtd:enum" value="4">(4) </num><content style="-uslm-dtd:text">not expel or refuse to re-enroll any member because of his health status or his requirements for health services;</content> </paragraph> <paragraph style="-uslm-dtd:paragraph" identifier="/us/sComp/78/373/tXIII/s1301/c/5" styleType="OLC"> <num style="-uslm-dtd:enum" value="5">(5) </num><content style="-uslm-dtd:text">be organized in such a manner that provides meaningful procedures for hearing and resolving grievances between the health maintenance organization (including the medical group or groups and other health delivery entities providing health services for the organization) and the members of the organization;</content> </paragraph> <paragraph style="-uslm-dtd:paragraph" identifier="/us/sComp/78/373/tXIII/s1301/c/6" styleType="OLC"> <num style="-uslm-dtd:enum" value="6">(6) </num><content style="-uslm-dtd:text">have organizational arrangements, established in accordance with regulations of the Secretary, for an ongoing quality assurance program for its health services which program (A) stresses health outcomes, and (B) provides review by physicians and other health professionals of the process followed in the provision of health services;</content> </paragraph> <paragraph style="-uslm-dtd:paragraph" identifier="/us/sComp/78/373/tXIII/s1301/c/7" styleType="OLC"> <num style="-uslm-dtd:enum" value="7">(7) </num><chapeau style="-uslm-dtd:text">adopt at least one of the following arrangements to protect its members from incurring liability for payment of any fees which are the legal obligation of such organization—</chapeau> <subparagraph style="-uslm-dtd:subparagraph" identifier="/us/sComp/78/373/tXIII/s1301/c/7/A" styleType="OLC"> <num style="-uslm-dtd:enum" value="A">(A) </num><content style="-uslm-dtd:text">a contractual arrangement with any hospital that is regularly used by the members of such organization prohibiting such hospital from holding any such member liable for payment of any fees which are the legal obligation of such organization;</content> </subparagraph> <subparagraph style="-uslm-dtd:subparagraph" identifier="/us/sComp/78/373/tXIII/s1301/c/7/B" styleType="OLC"> <num style="-uslm-dtd:enum" value="B">(B) </num><content style="-uslm-dtd:text">insolvency insurance, acceptable to the Secretary;</content> </subparagraph> <subparagraph style="-uslm-dtd:subparagraph" identifier="/us/sComp/78/373/tXIII/s1301/c/7/C" styleType="OLC"> <num style="-uslm-dtd:enum" value="C">(C) </num><content style="-uslm-dtd:text">adequate financial reserve, acceptable to the Secretary; and</content> </subparagraph> <subparagraph style="-uslm-dtd:subparagraph" identifier="/us/sComp/78/373/tXIII/s1301/c/7/D" styleType="OLC"> <num style="-uslm-dtd:enum" value="D">(D) </num><content style="-uslm-dtd:text">other arrangements, acceptable to the Secretary, to protect members,</content> </subparagraph> </paragraph><continuation style="-uslm-dtd:continuation-text" role="subsection">except that the requirements of this paragraph shall not apply to a health maintenance organization if applicable State law provides the members of such organization with protection from liability for payment of any fees which are the legal obligation of such organization; and</continuation> <paragraph style="-uslm-dtd:paragraph" identifier="/us/sComp/78/373/tXIII/s1301/c/8" styleType="OLC" class="leftIndentDecrease1"> <num style="-uslm-dtd:enum" value="8">(8) </num><content style="-uslm-dtd:text">provide, in accordance with regulations of the Secretary (including safeguards concerning the confidentiality of the doctor-patient relationship), an effective procedure for developing, compiling, evaluating, and reporting to the Secretary, statistics and other information (which the Secretary shall publish and disseminate on an annual basis and which the health maintenance organization shall disclose, in a manner acceptable to the Secretary, to its members and the general public) relating to (A) the cost of its operations, (B) the patterns of utilization of its services, (C) the availability, accessibility, and acceptability of its services, (D) to the extent practical, developments in the health status of its members, and (E) such other matters as the Secretary may require.</content> </paragraph><continuation style="-uslm-dtd:continuation-text" role="paragraph">The Secretary shall issue regulations stating the circumstances under which the Secretary, in administering paragraph (1)(A), will consider the resources of an organization which owns or controls a health maintenance organization. Such regulations shall require as a condition to consideration of resources that an organization which owns or controls a health maintenance organization shall provide satisfactory assurances that it will assume the financial obligations of the health maintenance organization.</continuation> </subsection> <subsection style="-uslm-dtd:subsection" identifier="/us/sComp/78/373/tXIII/s1301/d" styleType="OLC"> <num style="-uslm-dtd:enum" value="d">(d) </num><content style="-uslm-dtd:text">An organization that offers health benefits coverage shall not be considered as failing to meet the requirements of this section notwithstanding that it provides, with respect to coverage offered in connection with a group health plan in the small or large group market (as defined in section 2791(e)), an affiliation period consistent with the provisions of section 2701(g).</content> </subsection> </section> <section style="-uslm-dtd:section" identifier="/us/sComp/78/373/tXIII/s1302" styleType="traditional" role="definitions"> <heading style="-uslm-dtd:header">definitions </heading> <num style="-uslm-dtd:enum" value="1302">Sec. 1302. </num><editorialNote style="-uslm-dtd:usc-reference" role="uscRef"><b>[</b>300e–1<b>]</b> </editorialNote><chapeau style="-uslm-dtd:text">For purposes of this title:</chapeau> <paragraph style="-uslm-dtd:paragraph" identifier="/us/sComp/78/373/tXIII/s1302/1" styleType="OLC" class="leftIndentDecrease1"> <num style="-uslm-dtd:enum" value="1">(1) </num><chapeau style="-uslm-dtd:text">The term “<term style="-uslm-dtd:term">basic health services</term>” means—</chapeau> <subparagraph style="-uslm-dtd:subparagraph" identifier="/us/sComp/78/373/tXIII/s1302/1/A" styleType="OLC" class="leftIndentDecrease1"> <num style="-uslm-dtd:enum" value="A">(A) </num><content style="-uslm-dtd:text">physician services (including consultant and referral services by a physician);</content> </subparagraph> <subparagraph style="-uslm-dtd:subparagraph" identifier="/us/sComp/78/373/tXIII/s1302/1/B" styleType="OLC" class="leftIndentDecrease1"> <num style="-uslm-dtd:enum" value="B">(B) </num><content style="-uslm-dtd:text">inpatient and outpatient hospital services;</content> </subparagraph> <subparagraph style="-uslm-dtd:subparagraph" identifier="/us/sComp/78/373/tXIII/s1302/1/C" styleType="OLC" class="leftIndentDecrease1"> <num style="-uslm-dtd:enum" value="C">(C) </num><content style="-uslm-dtd:text">medically necessary emergency health services;</content> </subparagraph> <subparagraph style="-uslm-dtd:subparagraph" identifier="/us/sComp/78/373/tXIII/s1302/1/D" styleType="OLC" class="leftIndentDecrease1"> <num style="-uslm-dtd:enum" value="D">(D) </num><content style="-uslm-dtd:text">short-term (not to exceed twenty visits), outpatient evaluative and crisis intervention mental health services;</content> </subparagraph> <subparagraph style="-uslm-dtd:subparagraph" identifier="/us/sComp/78/373/tXIII/s1302/1/E" styleType="OLC" class="leftIndentDecrease1"> <num style="-uslm-dtd:enum" value="E">(E) </num><content style="-uslm-dtd:text">medical treatment and referral services (including referral services to appropriate ancillary services) for the abuse of or addiction to alcohol and drugs;</content> </subparagraph> <subparagraph style="-uslm-dtd:subparagraph" identifier="/us/sComp/78/373/tXIII/s1302/1/F" styleType="OLC" class="leftIndentDecrease1"> <num style="-uslm-dtd:enum" value="F">(F) </num><content style="-uslm-dtd:text">diagnostic laboratory and diagnostic and therapeutic radiologic services;</content> </subparagraph> <subparagraph style="-uslm-dtd:subparagraph" identifier="/us/sComp/78/373/tXIII/s1302/1/G" styleType="OLC" class="leftIndentDecrease1"> <num style="-uslm-dtd:enum" value="G">(G) </num><content style="-uslm-dtd:text">home health services; and</content> </subparagraph> <subparagraph style="-uslm-dtd:subparagraph" identifier="/us/sComp/78/373/tXIII/s1302/1/H" styleType="OLC" class="leftIndentDecrease1"> <num style="-uslm-dtd:enum" value="H">(H) </num><content style="-uslm-dtd:text">preventive health services (including (i) immunizations, (ii) well-child care from birth, (iii) periodic health evaluations for adults, (iv) voluntary family planning services, (v) infertility services, and (vi) children's eye and ear examinations conducted to determine the need for vision and hearing correction).</content> </subparagraph><continuation style="-uslm-dtd:continuation-text" role="paragraph">Such term does not include a health service which the Secretary, upon application of a health maintenance organization, determines is unusual and infrequently provided and not necessary for the protection of individual health. The Secretary shall publish in the Federal Register each determination made by him under the preceding sentence. If a service of a physician described in the preceding sentence may also be provided under applicable State law by a dentist, optometrist, podiatrist, psychologist, or other health care personnel a health maintenance organization may provide such service through a dentist, optometrist, podiatrist, psychologist, or other health care personnel (as the case may be) licensed to provide such service. Such term includes a health service directly associated with an organ transplant only if such organ transplant was required to be included in basic health services on April 15, 1985. For purposes of this paragraph, the term “<term style="-uslm-dtd:term">home health services</term>” means health services provided at a member's home by health care personnel, as prescribed or directed by the responsible physician or other authority designated by the health maintenance organization.</continuation> </paragraph> <paragraph style="-uslm-dtd:paragraph" identifier="/us/sComp/78/373/tXIII/s1302/2" styleType="OLC" class="leftIndentDecrease1"> <num style="-uslm-dtd:enum" value="2">(2) </num><content style="-uslm-dtd:text">The term “<term style="-uslm-dtd:term">supplemental health services</term>” means any health service which is not included as a basic health service under paragraph (1) of this section. If a health service provided by a physician may also be provided under applicable State law by a dentist, optometrist, podiatrist, psychologist, or other health care personnel, a health maintenance organization may provide such service through an optometrist, dentist, podiatrist, psychologist, or other health care personnel (as the case may be) licensed to provide such service.</content> </paragraph> <paragraph style="-uslm-dtd:paragraph" identifier="/us/sComp/78/373/tXIII/s1302/3" styleType="OLC" class="leftIndentDecrease1"> <num style="-uslm-dtd:enum" value="3">(3) </num><content style="-uslm-dtd:text">The term “<term style="-uslm-dtd:term">member</term>” when used in connection with a health maintenance organization means an individual who has entered into a contractual agreement, or on whose behalf a contractual arrangement has been entered into, with the organization under which the organization assumes the responsibility for the provision to such individual of basic health services and of such supplemental health services as may be contracted for.</content> </paragraph> <paragraph style="-uslm-dtd:paragraph" identifier="/us/sComp/78/373/tXIII/s1302/4" styleType="OLC" class="leftIndentDecrease1"> <num style="-uslm-dtd:enum" value="4">(4) </num><chapeau style="-uslm-dtd:text">The term “<term style="-uslm-dtd:term">medical group</term>” means a partnership, association, or other group—</chapeau> <subparagraph style="-uslm-dtd:subparagraph" identifier="/us/sComp/78/373/tXIII/s1302/4/A" styleType="OLC" class="leftIndentDecrease1"> <num style="-uslm-dtd:enum" value="A">(A) </num><content style="-uslm-dtd:text">which is composed of health professionals licensed to practice medicine or osteopathy and of such other licensed health professionals (including dentists, optometrists, podiatrists, and psychologists) as are necessary for the provision of health services for which the group is responsible;</content> </subparagraph> <subparagraph style="-uslm-dtd:subparagraph" identifier="/us/sComp/78/373/tXIII/s1302/4/B" styleType="OLC" class="leftIndentDecrease1"> <num style="-uslm-dtd:enum" value="B">(B) </num><content style="-uslm-dtd:text">a majority of the members of which are licensed to practice medicine or osteopathy; and</content> </subparagraph> <subparagraph style="-uslm-dtd:subparagraph" identifier="/us/sComp/78/373/tXIII/s1302/4/C" styleType="OLC" class="leftIndentDecrease1"> <num style="-uslm-dtd:enum" value="C">(C) </num><content style="-uslm-dtd:text">the members of which (i) as their principal professional activity engage in the coordinated practice of their profession and as a group responsibility have substantial responsibility for the delivery of health services to members of a health maintenance organization, except that this clause does not apply before the end of the forty-eight month period beginning after the month in which the health maintenance oranization<ref style="-uslm-dtd:footnote-ref" idref="ID42CC4C117DEC4AFD9F0955446A68416E" class="footnoteRef">1</ref> becomes a qualified health maintenance organization as defined in section 1310(d), or as authorized by the Secretary in accordance with regulations that take into consideration the usual circumstances of the group; (ii) pool their income from practice as members of the group and distribute it among themselves according to a prearranged salary or drawing account or other similar plan unrelated to the provision of specific health services; (iii) share medical and other records and substantial portions of major equipment and of professional, technical, and administrative staff; (iv) arrange for and encourage continuing education in the field of clinical medicine and related areas for the members of the group; and (v) establish an arrangement whereby a member's enrollment status is not known to the health professional who provides health services to the member.</content><footnote id="ID42CC4C117DEC4AFD9F0955446A68416E" style="-uslm-dtd:footnote"><sup style="-uslm-dtd:superscript">1</sup><p style="-uslm-dtd:para; margin-left:1em">So in law. Probably should be “<term style="-uslm-dtd:quote">organization</term>”.</p></footnote> </subparagraph> </paragraph> <paragraph style="-uslm-dtd:paragraph" identifier="/us/sComp/78/373/tXIII/s1302/5" styleType="OLC" class="leftIndentDecrease1"> <num style="-uslm-dtd:enum" value="5">(5) </num><chapeau style="-uslm-dtd:text">The term “<term style="-uslm-dtd:term">individual practice association</term>” means a partnership, corporation, association, or other legal entity which has entered into a services arrangement (or arrangements) with persons who are licensed to practice medicine, osteopathy, dentistry, podiatry, optometry, psychology, or other health profession in a State and a majority of whom are licensed to practice medicine or osteopathy. Such an arrangement shall provide—</chapeau> <subparagraph style="-uslm-dtd:subparagraph" identifier="/us/sComp/78/373/tXIII/s1302/5/A" styleType="OLC" class="leftIndentDecrease1"> <num style="-uslm-dtd:enum" value="A">(A) </num><content style="-uslm-dtd:text">that such persons shall provide their professional services in accordance with a compensation arrangement established by the entity; and</content> </subparagraph> <subparagraph style="-uslm-dtd:subparagraph" identifier="/us/sComp/78/373/tXIII/s1302/5/B" styleType="OLC" class="leftIndentDecrease1"> <num style="-uslm-dtd:enum" value="B">(B) </num><content style="-uslm-dtd:text">to the extent feasible, for the sharing by such persons of medical and other records, equipment, and professional, technical, and administrative staff.</content> </subparagraph> </paragraph> <paragraph style="-uslm-dtd:paragraph" identifier="/us/sComp/78/373/tXIII/s1302/6" styleType="OLC" class="leftIndentDecrease1"> <num style="-uslm-dtd:enum" value="6">(6) </num><content style="-uslm-dtd:text">The term “<term style="-uslm-dtd:term">health systems agency</term>” means an entity which is designated in accordance with section 1515 of this Act.</content> </paragraph> <paragraph style="-uslm-dtd:paragraph" identifier="/us/sComp/78/373/tXIII/s1302/7" styleType="OLC" class="leftIndentDecrease1"> <num style="-uslm-dtd:enum" value="7">(7) </num><content style="-uslm-dtd:text">The term “<term style="-uslm-dtd:term">medically underserved population</term>” means the population of an urban or rural area designated by the Secretary as an area with a shortage of personal health services or a population group designated by the Secretary as having a shortage of such services. Such a designation may be made by the Secretary only after consideration of the comments (if any) of (A) each State health planning and development agency which covers (in whole or in part) such urban or rural area or the area in which such population group resides, and (B) each health systems agency designated for a health service area which covers (in whole or in part) such urban or rural area or the area in which such population group resides.</content> </paragraph> <paragraph style="-uslm-dtd:paragraph" identifier="/us/sComp/78/373/tXIII/s1302/8" styleType="OLC" class="leftIndentDecrease1"> <num style="-uslm-dtd:enum" value="8">(8)</num><subparagraph style="-uslm-dtd:subparagraph" identifier="/us/sComp/78/373/tXIII/s1302/8/A" styleType="OLC" class="inline"><num style="-uslm-dtd:enum" value="A">(A) </num><content style="-uslm-dtd:text">The term “<term style="-uslm-dtd:term">community rating system</term>” means the systems, described in subparagraphs (B) and (C), of fixing rates of payments for health services. A health maintenance organization may fix its rates of payments under the system described in subparagraph (B) or (C) or under both such systems, but a health maintenance organization may use only one such system for fixing its rates of payments for any one group.</content></subparagraph> <subparagraph style="-uslm-dtd:subparagraph" identifier="/us/sComp/78/373/tXIII/s1302/8/B" styleType="OLC" class="leftIndentDecrease2"> <num style="-uslm-dtd:enum" value="B">(B) </num><content style="-uslm-dtd:text">A system of fixing rates of payment for health services may provide that the rates shall be fixed on a per-person or per-family basis and may authorize the rates to vary with the number of persons in a family, but, except as authorized in subparagraph (D), such rates must be equivalent for all individuals and for all families of similar composition.</content> </subparagraph> <subparagraph style="-uslm-dtd:subparagraph" identifier="/us/sComp/78/373/tXIII/s1302/8/C" styleType="OLC" class="leftIndentDecrease2"> <num style="-uslm-dtd:enum" value="C">(C) </num><chapeau style="-uslm-dtd:text">A system of fixing rates of payment for health services may provide that the rates shall be fixed for individuals and families by groups. Except as authorized in subparagraph (D), such rates must be equivalent for all individuals in the same group and for all families of similar composition in the same group. If a health maintenance organization is to fix rates of payment for individuals and families by groups, it shall—</chapeau> <clause style="-uslm-dtd:clause" identifier="/us/sComp/78/373/tXIII/s1302/8/C/i" styleType="OLC" class="leftIndentDecrease1"> <num style="-uslm-dtd:enum" value="i">(i)</num><subclause style="-uslm-dtd:subclause" identifier="/us/sComp/78/373/tXIII/s1302/8/C/i/I" styleType="OLC" class="inline"><num style="-uslm-dtd:enum" value="I">(I) </num><content style="-uslm-dtd:text">classify all of the members of the organization into classes based on factors which the health maintenance organization determines predict the differences in the use of health services by the individuals or families in each class and which have not been disapproved by the Secretary,</content></subclause> <subclause style="-uslm-dtd:subclause" identifier="/us/sComp/78/373/tXIII/s1302/8/C/i/II" styleType="OLC" class="leftIndentDecrease2"> <num style="-uslm-dtd:enum" value="II">(II) </num><content style="-uslm-dtd:text">determine its revenue requirements for providing services to the members of each class established under subclause (I), and</content> </subclause> <subclause style="-uslm-dtd:subclause" identifier="/us/sComp/78/373/tXIII/s1302/8/C/i/III" styleType="OLC" class="leftIndentDecrease2"> <num style="-uslm-dtd:enum" value="III">(III) </num><content style="-uslm-dtd:text">fix the rates of payments for the individuals and families of a group on the basis of a composite of the organization's revenue requirements determined under subclause (II) for providing services to them as members of the classes established under subclause (I), or</content> </subclause> </clause> <clause style="-uslm-dtd:clause" identifier="/us/sComp/78/373/tXIII/s1302/8/C/ii" styleType="OLC" class="leftIndentDecrease1"> <num style="-uslm-dtd:enum" value="ii">(ii) </num><content style="-uslm-dtd:text">fix the rates of payments for the individuals and families of a group on the basis of the organization's revenue requirements for providing services to the group, except that the rates of payments for the individuals and families of a group of less than 100 persons may not be fixed at rates greater than 110 percent of the rate that would be fixed for such individuals and families under subparagraph (B) or clause (i) of this subparagraph.</content> </clause><continuation style="-uslm-dtd:continuation-text" role="subparagraph">The Secretary shall review the factors used by each health maintenance organization to establish classes under clause (i). If the Secretary determines that any such factor may not reasonably be used to predict the use of the health services by individuals and families, the Secretary shall disapprove such factor for such purpose. If a health maintenance organization is to fix rates of payment for a group under clause (ii), it shall, upon request of the entity with which it contracts to provide services to such group, disclose to that entity the method and data used in calculating the rates of payment.</continuation> </subparagraph> <subparagraph style="-uslm-dtd:subparagraph" identifier="/us/sComp/78/373/tXIII/s1302/8/D" styleType="OLC" class="leftIndentDecrease2"> <num style="-uslm-dtd:enum" value="D">(D) </num><chapeau style="-uslm-dtd:text">The following differentials in rates of payments may be established under the systems described in subparagraphs (B) and (C):</chapeau> <clause style="-uslm-dtd:clause" identifier="/us/sComp/78/373/tXIII/s1302/8/D/i" styleType="OLC" class="leftIndentDecrease2"> <num style="-uslm-dtd:enum" value="i">(i) </num><chapeau style="-uslm-dtd:text">Nominal differentials in such rates may be established to reflect differences in marketing costs and the different administrative costs of collecting payments from the following categories of members:</chapeau> <subclause style="-uslm-dtd:subclause" identifier="/us/sComp/78/373/tXIII/s1302/8/D/i/I" styleType="OLC" class="leftIndentDecrease2"> <num style="-uslm-dtd:enum" value="I">(I) </num><content style="-uslm-dtd:text">Individual members (including their families).</content> </subclause> <subclause style="-uslm-dtd:subclause" identifier="/us/sComp/78/373/tXIII/s1302/8/D/i/II" styleType="OLC" class="leftIndentDecrease2"> <num style="-uslm-dtd:enum" value="II">(II) </num><content style="-uslm-dtd:text">Small groups of members (as determined under regulations of the Secretary).</content> </subclause> <subclause style="-uslm-dtd:subclause" identifier="/us/sComp/78/373/tXIII/s1302/8/D/i/III" styleType="OLC" class="leftIndentDecrease2"> <num style="-uslm-dtd:enum" value="III">(III) </num><content style="-uslm-dtd:text">Large groups of members (as determined under regulations of the Secretary).</content> </subclause> </clause> <clause style="-uslm-dtd:clause" identifier="/us/sComp/78/373/tXIII/s1302/8/D/ii" styleType="OLC" class="leftIndentDecrease2"> <num style="-uslm-dtd:enum" value="ii">(ii) </num><content style="-uslm-dtd:text">Nominal differentials in such rates may be established to reflect the compositing of the rates of payment in a systematic manner to accommodate group purchasing practices of the various employers.</content> </clause> <clause style="-uslm-dtd:clause" identifier="/us/sComp/78/373/tXIII/s1302/8/D/iii" styleType="OLC" class="leftIndentDecrease2"> <num style="-uslm-dtd:enum" value="iii">(iii) </num><content style="-uslm-dtd:text">Differentials in such rates may be established for members enrolled in a health maintenance organization pursuant to a contract with a governmental authority under section 1079 or 1086 of title 10, United States Code, or under any other governmental program (other than the health benefits program authorized by chapter 89 of title 5, United States Code) or any health benefits program for employees of States, political subdivision of States, and other public entities.</content> </clause> </subparagraph> </paragraph> <paragraph style="-uslm-dtd:paragraph" identifier="/us/sComp/78/373/tXIII/s1302/9" styleType="OLC" class="leftIndentDecrease1"> <num style="-uslm-dtd:enum" value="9">(9) </num><content style="-uslm-dtd:text">The term “<term style="-uslm-dtd:term">non-metropolitan area</term>” means an area no part of which is within an area designated as a standard metropolitan statistical area by the Office of Management and Budget and which does not contain a city whose population exceeds fifty thousand individuals.</content> </paragraph> </section> <section style="-uslm-dtd:section" identifier="/us/sComp/78/373/tXIII/s1305" styleType="traditional"> <heading style="-uslm-dtd:header">loans and loan guarantees for initial costs of operation </heading> <num style="-uslm-dtd:enum" value="1305">Sec. 1305. </num><editorialNote style="-uslm-dtd:usc-reference" role="uscRef"><b>[</b>300e–4<b>]</b> </editorialNote><subsection style="-uslm-dtd:subsection" identifier="/us/sComp/78/373/tXIII/s1305/a" styleType="OLC" class="inline"><num style="-uslm-dtd:enum" value="a">(a) </num><chapeau style="-uslm-dtd:text">The Secretary may—</chapeau> <paragraph style="-uslm-dtd:paragraph" identifier="/us/sComp/78/373/tXIII/s1305/a/1" styleType="OLC"> <num style="-uslm-dtd:enum" value="1">(1) </num><content style="-uslm-dtd:text">make loans to public or private health maintenance organizations to assist them in meeting the amount by which their costs of operation during a period not to exceed the first sixty months of their operation exceed their revenues in that period;</content> </paragraph> <paragraph style="-uslm-dtd:paragraph" identifier="/us/sComp/78/373/tXIII/s1305/a/2" styleType="OLC"> <num style="-uslm-dtd:enum" value="2">(2) </num><content style="-uslm-dtd:text">make loans to public or private health maintenance organizations to assist them in meeting the amount by which their costs of operation, which the Secretary determines are attributable to significant expansion in their membership or area served and which are incurred during a period not to exceed the first sixty months of their operation after such expansion, exceed their revenues in that period which the Secretary determines are attributable to such expansion; and</content> </paragraph> <paragraph style="-uslm-dtd:paragraph" identifier="/us/sComp/78/373/tXIII/s1305/a/3" styleType="OLC"> <num style="-uslm-dtd:enum" value="3">(3) </num><content style="-uslm-dtd:text">guarantee to non-Federal lenders payment of the principal of and the interest on loans made to private health maintenance organizations for the amounts referred to in paragraphs (1) and (2).</content> </paragraph><continuation style="-uslm-dtd:continuation-text" role="subsection">No loan or loan guarantee may be made under this subsection for the costs of operation of a health maintenance organization unless the Secretary determines that the organization has made all reasonable attempts to meet such costs, and unless the Secretary has made a grant or loan to, entered into a contract with, or guaranteed a loan for, the organization in fiscal year 1981, 1982, 1983, 1984, or 1985 under this section or section 1304(b) (as in effect before October 1, 1985).</continuation></subsection> <subsection style="-uslm-dtd:subsection" identifier="/us/sComp/78/373/tXIII/s1305/b" styleType="OLC"> <num style="-uslm-dtd:enum" value="b">(b)</num><paragraph style="-uslm-dtd:paragraph" identifier="/us/sComp/78/373/tXIII/s1305/b/1" styleType="OLC" class="inline"><num style="-uslm-dtd:enum" value="1">(1) </num><content style="-uslm-dtd:text">Except as provided in paragraph (2), the aggregate amount of principal of loans made or guaranteed, or both, under subsection (a) for a health maintenance organization may not exceed $7,000,000. In any twelve-month period the amount disbursed to a health maintenance organization under this section (either directly by the Secretary, by an escrow agent under the terms of an escrow agreement, or by a lender under a guaranteed loan) may not exceed $3,000,000.</content></paragraph> <paragraph style="-uslm-dtd:paragraph" identifier="/us/sComp/78/373/tXIII/s1305/b/2" styleType="OLC" class="leftIndentDecrease1"> <num style="-uslm-dtd:enum" value="2">(2) </num><content style="-uslm-dtd:text">The cumulative total of the principal of the loans outstanding at any time which have been directly made or with respect to which guarantees have been issued under subsection (a) may not exceed such limitations as may be specified in appropriation Acts.</content> </paragraph> </subsection> <subsection style="-uslm-dtd:subsection" identifier="/us/sComp/78/373/tXIII/s1305/c" styleType="OLC"> <num style="-uslm-dtd:enum" value="c">(c) </num><content style="-uslm-dtd:text">Loans under this section shall be made from the fund established under section 1308(e).</content> </subsection> <subsection style="-uslm-dtd:subsection" identifier="/us/sComp/78/373/tXIII/s1305/d" styleType="OLC"> <num style="-uslm-dtd:enum" value="d">(d) </num><content style="-uslm-dtd:text">No loan may be made or guaranteed under this section after September 30, 1986.</content> </subsection> <subsection style="-uslm-dtd:subsection" identifier="/us/sComp/78/373/tXIII/s1305/e" styleType="OLC"> <num style="-uslm-dtd:enum" value="e">(e) </num><content style="-uslm-dtd:text">Of the sums used for loans under this section in any fiscal year from the loan fund established under section 1308(e), not less than 20 per centum shall be used for loans for projects (1) for the initial operation of health maintenance organizations which the Secretary determines have not less than 66 per centum of their membership drawn from residents of nonmetropolitan areas, and (2) the applications for which meet the requirements of this title for approval.</content> </subsection> <subsection style="-uslm-dtd:subsection" identifier="/us/sComp/78/373/tXIII/s1305/f" styleType="OLC"> <num style="-uslm-dtd:enum" value="f">(f) </num><content style="-uslm-dtd:text">In considering applications for loan guarantees under this section, the Secretary shall give special consideration to applications for health maintenance organizations which will serve medically underserved populations.</content> </subsection> </section> <section style="-uslm-dtd:section" identifier="/us/sComp/78/373/tXIII/s1306" styleType="traditional"> <heading style="-uslm-dtd:header">application requirements </heading> <num style="-uslm-dtd:enum" value="1306">Sec. 1306. </num><editorialNote style="-uslm-dtd:usc-reference" role="uscRef"><b>[</b>300e–5<b>]</b> </editorialNote><subsection style="-uslm-dtd:subsection" identifier="/us/sComp/78/373/tXIII/s1306/a" styleType="OLC" class="inline"><num style="-uslm-dtd:enum" value="a">(a) </num><content style="-uslm-dtd:text">No loan or loan guarantee may be made under this title unless an application therefor has been submitted to and approved by the Secretary.</content></subsection> <subsection style="-uslm-dtd:subsection" identifier="/us/sComp/78/373/tXIII/s1306/b" styleType="OLC"> <num style="-uslm-dtd:enum" value="b">(b) </num><chapeau style="-uslm-dtd:text">The Secretary may not approve an application for a loan or loan guarantee under this title unless—</chapeau> <paragraph style="-uslm-dtd:paragraph" identifier="/us/sComp/78/373/tXIII/s1306/b/1" styleType="OLC"> <num style="-uslm-dtd:enum" value="1">(1) </num><content style="-uslm-dtd:text">such application meets the requirements of section 1308;</content> </paragraph> <paragraph style="-uslm-dtd:paragraph" identifier="/us/sComp/78/373/tXIII/s1306/b/2" styleType="OLC"> <num style="-uslm-dtd:enum" value="2">(2) </num><content style="-uslm-dtd:text">in the case of an application for assistance under section 1305, he determines that the applicant making the application would not be able to complete the project or undertaking for which the application is submitted without the assistance applied for;</content> </paragraph> <paragraph style="-uslm-dtd:paragraph" identifier="/us/sComp/78/373/tXIII/s1306/b/3" styleType="OLC"> <num style="-uslm-dtd:enum" value="3">(3) </num><content style="-uslm-dtd:text">the application contains satisfactory specification of the existing or anticipated (A) population group or groups to be served by the proposed or existing health maintenance organization described in the application, (B) membership of such organization, (C) methods, terms, and periods of the enrollment of members of such organization, (D) estimated costs per member of the health and educational services to be provided by such organization and the nature of such costs, (E) sources of professional services for such organization, and organizational arrangements of such organization for providing health and educational services, (F) organizational arrangements of such organization for an ongoing quality assurance program in conformity with the requirements of section 1301(c), (G) sources of prepayment and other forms of payment for the services to be provided by such organization, (H) facilities, and additional capital investments and sources of financing therefor, available to such organization to provide the level and scope of services proposed, (I) administrative, managerial, and financial arrangements and capabilities of such organization, (J) role for members in the planning and policymaking for such organization, (K) grievance procedures for members of such organization, and (L) evaluations of the support for and acceptance of such organization by the population to be served, the sources of operating support, and the professional groups to be involved or affected thereby;</content> </paragraph> <paragraph style="-uslm-dtd:paragraph" identifier="/us/sComp/78/373/tXIII/s1306/b/4" styleType="OLC"> <num style="-uslm-dtd:enum" value="4">(4) </num><content style="-uslm-dtd:text">contains or is supported by assurances satisfactory to the Secretary that the applicant making the application will, in accordance with such criteria as the Secretary shall by regulation prescribe, enroll, and maintain an enrollment of the maximum number of members that its available and potential resources (as determined under regulations of the Secretary) will enable it to effectively serve;</content> </paragraph> <paragraph style="-uslm-dtd:paragraph" identifier="/us/sComp/78/373/tXIII/s1306/b/5" styleType="OLC"> <num style="-uslm-dtd:enum" value="5">(5) </num><content style="-uslm-dtd:text">in the case of an application made for a project which previously received a grant, contract, loan, or loan guarantee under this title, such application contains or is supported by assurances satisfactory to the Secretary that the applicant making the application has the financial capability to adequately carry out the purposes of such project and has developed and operated such project in accordance with the requirements of this title and with the plans contained in previous applications for such assistance;</content> </paragraph> <paragraph style="-uslm-dtd:paragraph" identifier="/us/sComp/78/373/tXIII/s1306/b/6" styleType="OLC"> <num style="-uslm-dtd:enum" value="6">(6) </num><content style="-uslm-dtd:text">the application contains such assurances as the Secretary may require respecting the intent and the ability of the applicant to meet the requirements of paragraphs (1) and (2) of section 1301(b) respecting the fixing of basic health services payments and supplemental health services payments under a community rating system; and</content> </paragraph> <paragraph style="-uslm-dtd:paragraph" identifier="/us/sComp/78/373/tXIII/s1306/b/7" styleType="OLC"> <num style="-uslm-dtd:enum" value="7">(7) </num><content style="-uslm-dtd:text">the application is submitted in such form and manner, and contains such additional information, as the Secretary shall prescribe in regulations.</content> </paragraph><continuation style="-uslm-dtd:continuation-text" role="subsection">An organization making multiple applications for more than one loan or loan guarantee under this title, simultaneously or over the course of time, shall not be required to submit duplicate or redundant information but shall be required to update the specifications (required by paragraph (3)) respecting the existing or proposed health maintenance organization in such manner and with such frequency as the Secretary may by regulation prescribe. In determining, for purposes of paragraph (2), whether an applicant would be able to complete a project or undertaking without the assistance applied for, the Secretary shall not consider any asset of the applicant the obligation of which for such undertaking or project would jeopardize the fiscal soundness of the applicant.</continuation> </subsection> <subsection style="-uslm-dtd:subsection" identifier="/us/sComp/78/373/tXIII/s1306/c" styleType="OLC"> <num style="-uslm-dtd:enum" value="c">(c) </num><content style="-uslm-dtd:text">The Secretary shall by regulation establish standards and procedures for health systems agencies to follow in reviewing and commenting on applications for loans and loan guarantees under this title.</content> </subsection> </section> <section style="-uslm-dtd:section" identifier="/us/sComp/78/373/tXIII/s1307" styleType="traditional"> <heading style="-uslm-dtd:header">administration of assistance programs </heading> <num style="-uslm-dtd:enum" value="1307">Sec. 1307. </num><editorialNote style="-uslm-dtd:usc-reference" role="uscRef"><b>[</b>300e–6<b>]</b> </editorialNote><subsection style="-uslm-dtd:subsection" identifier="/us/sComp/78/373/tXIII/s1307/a" styleType="OLC" class="inline"><num style="-uslm-dtd:enum" value="a">(a)</num><paragraph style="-uslm-dtd:paragraph" identifier="/us/sComp/78/373/tXIII/s1307/a/1" styleType="OLC" class="inline"><num style="-uslm-dtd:enum" value="1">(1) </num><content style="-uslm-dtd:text">Each recipient of a loan or loan guarantee under this title shall keep such records as the Secretary shall prescribe, including records which fully disclose the amount and disposition by such recipient of the proceeds of the loan (directly made or guaranteed), the total cost of the undertaking in connection with which the loan was given or used, the amount of that portion of the cost of the undertaking supplied by other sources, and such other records as will facilitate an effective audit.</content></paragraph> <paragraph style="-uslm-dtd:paragraph" identifier="/us/sComp/78/373/tXIII/s1307/a/2" styleType="OLC" class="leftIndentDecrease1"> <num style="-uslm-dtd:enum" value="2">(2) </num><content style="-uslm-dtd:text">The Secretary, or any of his duly authorized representatives, shall have access for the purpose of audit and examination to any books, documents, papers, and records of the recipients of a loan or loan guarantee under this title which relate to such assistance.</content> </paragraph></subsection> <subsection style="-uslm-dtd:subsection" identifier="/us/sComp/78/373/tXIII/s1307/b" styleType="OLC"> <num style="-uslm-dtd:enum" value="b">(b) </num><content style="-uslm-dtd:text">Upon expiration of the period for which a loan or loan guarantee was provided an entity under this title, such entity shall make a full and complete report to the Secretary in such manner as he may by regulation prescribe. Each such report shall contain, among such other matters as the Secretary may by regulation require, descriptions of plans, developments, and operations relating to the matters referred to in section 1306(b)(3).</content> </subsection> <subsection style="-uslm-dtd:subsection" identifier="/us/sComp/78/373/tXIII/s1307/d" styleType="OLC"> <num style="-uslm-dtd:enum" value="d">(d)<ref style="-uslm-dtd:footnote-ref" idref="IDE4F4A238AE9846CDBC7449DF64D535DD" class="footnoteRef">2</ref> </num><chapeau style="-uslm-dtd:text">An entity which provides health services to a defined population on a prepaid basis and which has members who are entitled to insurance benefits under title XVIII of the Social Security Act or to medical assistance under a State plan approved under title XIX of such Act may be considered as a health maintenance organization for purposes of receiving assistance under this title if—</chapeau><footnote id="IDE4F4A238AE9846CDBC7449DF64D535DD" style="-uslm-dtd:footnote"><sup style="-uslm-dtd:superscript">2</sup><p style="-uslm-dtd:para; margin-left:1em">Former subsection (c) was repealed by section 803(a) of Public Law 99–660.</p></footnote> <paragraph style="-uslm-dtd:paragraph" identifier="/us/sComp/78/373/tXIII/s1307/d/1" styleType="OLC"> <num style="-uslm-dtd:enum" value="1">(1) </num><content style="-uslm-dtd:text">with respect to its members who are entitled to such insurance benefits or to such medical assistance it (A) provides health services in accordance with section 1301(b), except that (i) it does not furnish to those members the health services (within the basic health services) for which it may not be compensated under such title XVIII or such State plan, and (ii) it does not fix the basic or supplemental health services payment for such members under a community rating system, and (B) is organized and operated in the manner prescribed by section 1301(c), except that it does not assume full financial risk on a prospective basis for the provision to such members of basic or supplemental health services with respect to which it is not required under such title XVIII or such State plan to assume such financial risk; and</content> </paragraph> <paragraph style="-uslm-dtd:paragraph" identifier="/us/sComp/78/373/tXIII/s1307/d/2" styleType="OLC"> <num style="-uslm-dtd:enum" value="2">(2) </num><content style="-uslm-dtd:text">with respect to its other members it provides health services in accordance with section 1301(b) and is organized and operated in the manner prescribed by section 1301(c).</content> </paragraph><continuation style="-uslm-dtd:continuation-text" role="subsection">An entity which provides health services to a defined population on a prepaid basis and which has members who are enrolled under the health benefits program authorized by chapter 89 of title 5, United States Code, may be considered as a health maintenance organization for purposes of receiving assistance under this title if with respect to its other members it provides health services in accordance with section 1301(b) and is organized and operated in the manner prescribed by section 1301(c).</continuation> </subsection> </section> <section style="-uslm-dtd:section" identifier="/us/sComp/78/373/tXIII/s1308" styleType="traditional"> <heading style="-uslm-dtd:header">general provisions relating to loan guarantees and loans </heading> <num style="-uslm-dtd:enum" value="1308">Sec. 1308. </num><editorialNote style="-uslm-dtd:usc-reference" role="uscRef"><b>[</b>300e–7<b>]</b> </editorialNote><subsection style="-uslm-dtd:subsection" identifier="/us/sComp/78/373/tXIII/s1308/a" styleType="OLC" class="inline"><num style="-uslm-dtd:enum" value="a">(a)</num><paragraph style="-uslm-dtd:paragraph" identifier="/us/sComp/78/373/tXIII/s1308/a/1" styleType="OLC" class="inline"><num style="-uslm-dtd:enum" value="1">(1) </num><content style="-uslm-dtd:text">The Secretary may not approve an application for a loan guarantee under this title unless he determines that (A) the terms, conditions, security (if any), and schedule and amount of repayments with respect to the loan are sufficient to protect the financial interests of the United States and are otherwise reasonable, including a determination that the rate of interest does not exceed such per centum per annum on the principal obligation outstanding as the Secretary determines to be reasonable, taking into account the range of interest rates prevailing in the private market for loans with similar maturities, terms, conditions, and security and the risks assumed by the United States, and (B) the loan would not be available on reasonable terms and conditions without the guarantee under this title.</content></paragraph> <paragraph style="-uslm-dtd:paragraph" identifier="/us/sComp/78/373/tXIII/s1308/a/2" styleType="OLC" class="leftIndentDecrease1"> <num style="-uslm-dtd:enum" value="2">(2)</num><subparagraph style="-uslm-dtd:subparagraph" identifier="/us/sComp/78/373/tXIII/s1308/a/2/A" styleType="OLC" class="inline"><num style="-uslm-dtd:enum" value="A">(A) </num><content style="-uslm-dtd:text">The United States shall be entitled to recover from the applicant for a loan guarantee under this title the amount of any payment made pursuant to such guarantee, unless the Secretary for good cause waives such right of recovery; and, upon making any such payment, the United States shall be subrogated to all of the rights of the recipient of the payments with respect to which the guarantee was made.</content></subparagraph> <subparagraph style="-uslm-dtd:subparagraph" identifier="/us/sComp/78/373/tXIII/s1308/a/2/B" styleType="OLC" class="leftIndentDecrease2"> <num style="-uslm-dtd:enum" value="B">(B) </num><content style="-uslm-dtd:text">To the extent permitted by subparagraph (C), any terms and conditions applicable to a loan guarantee under this title (including terms and conditions imposed under subparagraph (D)) may be modified by the Secretary to the extent he determines it to be consistent with the financial interest of the United States.</content> </subparagraph> <subparagraph style="-uslm-dtd:subparagraph" identifier="/us/sComp/78/373/tXIII/s1308/a/2/C" styleType="OLC" class="leftIndentDecrease2"> <num style="-uslm-dtd:enum" value="C">(C) </num><content style="-uslm-dtd:text">Any loan guarantee made by the Secretary under this title shall be incontestable (i) in the hands of an applicant on whose behalf such guarantee is made unless the applicant engaged in fraud or misrepresentation in securing such guarantee, and (ii) as to any person (or his successor in interest) who makes or contracts to make a loan to such applicant in reliance thereon unless such person (or his successor in interest) engaged in fraud or misrepresentation in making or contracting to make such loan.</content> </subparagraph> <subparagraph style="-uslm-dtd:subparagraph" identifier="/us/sComp/78/373/tXIII/s1308/a/2/D" styleType="OLC" class="leftIndentDecrease2"> <num style="-uslm-dtd:enum" value="D">(D) </num><content style="-uslm-dtd:text">guarantees of loans under this title shall be subject to such further terms and conditions as the Secretary determines to be necessary to assure that the purposes of this title will be achieved.</content> </subparagraph> </paragraph></subsection> <subsection style="-uslm-dtd:subsection" identifier="/us/sComp/78/373/tXIII/s1308/b" styleType="OLC"> <num style="-uslm-dtd:enum" value="b">(b)</num><paragraph style="-uslm-dtd:paragraph" identifier="/us/sComp/78/373/tXIII/s1308/b/1" styleType="OLC" class="inline"><num style="-uslm-dtd:enum" value="1">(1) </num><chapeau style="-uslm-dtd:text">The Secretary may not approve an application for a loan under this title unless—</chapeau> <subparagraph style="-uslm-dtd:subparagraph" identifier="/us/sComp/78/373/tXIII/s1308/b/1/A" styleType="OLC" class="leftIndentDecrease1"> <num style="-uslm-dtd:enum" value="A">(A) </num><content style="-uslm-dtd:text">the Secretary is reasonably satisfied that the applicant therefor will be able to make payments of principal and interest thereon when due, and</content> </subparagraph> <subparagraph style="-uslm-dtd:subparagraph" identifier="/us/sComp/78/373/tXIII/s1308/b/1/B" styleType="OLC" class="leftIndentDecrease1"> <num style="-uslm-dtd:enum" value="B">(B) </num><content style="-uslm-dtd:text">the applicant provides the Secretary with reasonable assurances that there will be available to it such additional funds as may be necessary to complete the project or undertaking with respect to which such loan is requested.</content> </subparagraph></paragraph> <paragraph style="-uslm-dtd:paragraph" identifier="/us/sComp/78/373/tXIII/s1308/b/2" styleType="OLC" class="leftIndentDecrease1"> <num style="-uslm-dtd:enum" value="2">(2) </num><content style="-uslm-dtd:text">Any loan made under this title shall (A) have such security, (B) have such maturity date, (C) be repayable in such installments, (D) on the date the loan is made, bear interest at a rate comparable to the rate of interest prevailing on such date with respect to marketable obligations of the United States of comparable maturities, adjusted to provide for appropriate administrative charges, and (E) be subject to such other terms and conditions (including provisions for recovery in case of default), as the Secretary determines to be necessary to carry out the purposes of this title while adequately protecting the financial interests of the United States. On the date disbursements are made under a loan after the initial disbursement under the loan, the Secretary may change the rate of interest on the amount of the loan disbursed on that date to a rate which is comparable to the rate of interest prevailing on the date the subsequent disbursement is made with respect to marketable obligations of the United States of comparable maturities, adjusted to provide for appropriate administrative charges.</content> </paragraph> <paragraph style="-uslm-dtd:paragraph" identifier="/us/sComp/78/373/tXIII/s1308/b/3" styleType="OLC" class="leftIndentDecrease1"> <num style="-uslm-dtd:enum" value="3">(3) </num><content style="-uslm-dtd:text">The Secretary may, for good cause but with due regard to the financial interests of the United States, waive any right of recovery which he has by reason of the failure of a borrower to make payments of principal of and interest on a loan made under this title, except that if such loan is sold and guaranteed, any such waiver shall have no effect upon the Secretary's guarantee of timely payment of principal and interest.</content> </paragraph> </subsection> <subsection style="-uslm-dtd:subsection" identifier="/us/sComp/78/373/tXIII/s1308/c" styleType="OLC"> <num style="-uslm-dtd:enum" value="c">(c)</num><paragraph style="-uslm-dtd:paragraph" identifier="/us/sComp/78/373/tXIII/s1308/c/1" styleType="OLC" class="inline"><num style="-uslm-dtd:enum" value="1">(1) </num><content style="-uslm-dtd:text">The Secretary may from time to time, but with due regard to the financial interests of the United States, sell loans made by him under this title.</content></paragraph> <paragraph style="-uslm-dtd:paragraph" identifier="/us/sComp/78/373/tXIII/s1308/c/2" styleType="OLC" class="leftIndentDecrease1"> <num style="-uslm-dtd:enum" value="2">(2) </num><content style="-uslm-dtd:text">The Secretary may agree, prior to his sale of any such loan, to guarantee to the purchaser (and any successor in interest of the purchaser) compliance by the borrower with the terms and conditions of such loan. Any such agreement shall contain such terms and conditions as the Secretary considers necessary to protect the financial interests of the United States or as otherwise appropriate. Any such agreement may (A) provide that the Secretary shall act as agent of any such purchaser for the purpose of collecting from the borrower to which such loan was made and paying over to such purchaser, any payments of principal and interest payable by such organization under such loan; and (B) provide for the repurchase by the Secretary of any such loan on such terms and conditions as may be specified in the agreement. The full faith and credit of the United States is pledged to the payment of all amounts which may be required to be paid under any guarantee under this paragraph.</content> </paragraph> <paragraph style="-uslm-dtd:paragraph" identifier="/us/sComp/78/373/tXIII/s1308/c/3" styleType="OLC" class="leftIndentDecrease1"> <num style="-uslm-dtd:enum" value="3">(3) </num><content style="-uslm-dtd:text">After any loan under this title to a public health maintenance organization has been sold and guaranteed under this subsection, interest paid on such loan which is received by the purchaser thereof (or his successor in interest) shall be included in the gross income of the purchaser of the loan (or his successor in interest) for the purpose of chapter 1 of the Internal Revenue Code of 1954.</content> </paragraph> <paragraph style="-uslm-dtd:paragraph" identifier="/us/sComp/78/373/tXIII/s1308/c/4" styleType="OLC" class="leftIndentDecrease1"> <num style="-uslm-dtd:enum" value="4">(4) </num><content style="-uslm-dtd:text">Amounts received by the Secretary as proceeds from the sale of loans under this subsection shall be deposited in the loan fund established under subsection (e).</content> </paragraph> <paragraph style="-uslm-dtd:paragraph" identifier="/us/sComp/78/373/tXIII/s1308/c/5" styleType="OLC" class="leftIndentDecrease1"> <num style="-uslm-dtd:enum" value="5">(5) </num><content style="-uslm-dtd:text">Any reference in this title (other than in this subsection and in subsection (d)) to a loan guarantee under this title does not include a loan guarantee made under this subsection.</content> </paragraph> </subsection> <subsection style="-uslm-dtd:subsection" identifier="/us/sComp/78/373/tXIII/s1308/d" styleType="OLC"> <num style="-uslm-dtd:enum" value="d">(d)</num><paragraph style="-uslm-dtd:paragraph" identifier="/us/sComp/78/373/tXIII/s1308/d/1" styleType="OLC" class="inline"><num style="-uslm-dtd:enum" value="1">(1) </num><content style="-uslm-dtd:text">There is established in the Treasury a loan guarantee fund (hereinafter in this subsection referred to as the “<quotedText style="-uslm-dtd:quote">fund</quotedText>”) which shall be available to the Secretary without fiscal year limitation, in such amounts as may be specified from time to time in appropriation Acts, to enable him to discharge his responsibilities under loan guarantees issued by him under this title and to take the action authorized by subsection (f). There are authorized to be appropriated from time to time such amounts as may be necessary to provide the sums required for the fund. To the extent authorized in appropriation Acts, there shall also be deposited in the fund amounts received by the Secretary in connection with loan guarantees under this title and other property or assets derived by him from his operations respecting such loan guarantees, including any money derived from the sale of assets.</content></paragraph> <paragraph style="-uslm-dtd:paragraph" identifier="/us/sComp/78/373/tXIII/s1308/d/2" styleType="OLC" class="leftIndentDecrease1"> <num style="-uslm-dtd:enum" value="2">(2) </num><content style="-uslm-dtd:text">If at any time the sums in the funds are insufficient to enable the Secretary to discharge his responsibilities under guarantees issued by him before October 1, 1986, under this title and to take the action authorized by subsection (f), he is authorized to issue to the Secretary of the Treasury notes or other obligations in such forms and denominations, bearing such maturities, and subject to such terms and conditions, as may be prescribed by the Secretary with the approval of the Secretary of Treasury. Such notes or other obligations shall bear interest at a rate determined by the Secretary of the Treasury, taking into consideration the current average market yield on outstanding marketable obligations of the United States of comparable maturities during the month preceding the issuance of the notes or other obligations. The Secretary of the Treasury shall purchase any notes and other obligations issued under this paragraph and for that purpose he may use as a public debt transaction the proceeds from the sale of any securities issued under the Second Liberty Bond Act, and the purposes for which the securities may be issued under that Act are extended to include any purchase of such notes and obligations. The Secretary of the Treasury may at any time sell any of the notes or other obligations acquired by him under this paragraph. All redemptions, purchases, and sales by the Secretary of the Treasury of such notes or other obligations shall be treated as public debt transactions of the United States. Sums borrowed under this paragraph shall be deposited in the fund and redemption of such notes and obligations shall be made by the Secretary from the fund.</content> </paragraph> </subsection> <subsection style="-uslm-dtd:subsection" identifier="/us/sComp/78/373/tXIII/s1308/e" styleType="OLC"> <num style="-uslm-dtd:enum" value="e">(e) </num><content style="-uslm-dtd:text">There is established in the Treasury a loan fund (hereinafter in this subsection referred to as the “<quotedText style="-uslm-dtd:quote">fund</quotedText>”) which shall be available to the Secretary without fiscal year limitation, in such amounts as may be specified from time to time in appropriation Acts, to enable him to make loans under this title and to take the action authorized by subsection (f). There shall also be deposited in the fund amounts received by the Secretary as interest payments and repayment of principal on loans made under this title and other property or assets derived by him from his operations respecting such loans, from the sale of loans under subsection (c) of this section, or from the sale of assets.</content> </subsection> <subsection style="-uslm-dtd:subsection" identifier="/us/sComp/78/373/tXIII/s1308/f" styleType="OLC"> <num style="-uslm-dtd:enum" value="f">(f) </num><content style="-uslm-dtd:text">The Secretary may take such action as he deems appropriate to protect the interest of the United States in the event of a default on a loan made or guaranteed under this title, including taking possession of, holding, and using real property pledged as security for such a loan or loan guarantee.</content> </subsection> </section> <section style="-uslm-dtd:section" identifier="/us/sComp/78/373/tXIII/s1309" styleType="traditional"> <heading style="-uslm-dtd:header">authorizations of appropriations </heading> <num style="-uslm-dtd:enum" value="1309">Sec. 1309. </num><editorialNote style="-uslm-dtd:usc-reference" role="uscRef"><b>[</b>300e–8<b>]</b> </editorialNote><subsection style="-uslm-dtd:subsection" identifier="/us/sComp/78/373/tXIII/s1309/a" styleType="OLC" class="inline"><num style="-uslm-dtd:enum" value="a">(a) </num><content style="-uslm-dtd:text">For grants under section 1317 there is authorized to be appropriated $1,000,000 for each of the fiscal years 1982, 1983, and 1984.</content></subsection> <subsection style="-uslm-dtd:subsection" identifier="/us/sComp/78/373/tXIII/s1309/b" styleType="OLC"> <num style="-uslm-dtd:enum" value="b">(b) </num><content style="-uslm-dtd:text">To meet the obligations of the loan fund established under section 1308(e) resulting from defaults on loans made from the fund and to meet the other obligations of the fund, there is authorized to be appropriated to the loan fund for fiscal years 1987, 1988, and 1989, such sums as may be necessary.</content> </subsection> </section> <section style="-uslm-dtd:section" identifier="/us/sComp/78/373/tXIII/s1310" styleType="traditional"> <heading style="-uslm-dtd:header">employees' health benefits plans </heading> <num style="-uslm-dtd:enum" value="1310">Sec. 1310.<ref style="-uslm-dtd:footnote-ref" idref="ID34DFF4402FB64B99BD38448477BD7308" class="footnoteRef">3</ref> </num><editorialNote style="-uslm-dtd:usc-reference" role="uscRef"><b>[</b>300e–9<b>]</b> </editorialNote><subsection style="-uslm-dtd:subsection" identifier="/us/sComp/78/373/tXIII/s1310/a" styleType="OLC" class="inline"><num style="-uslm-dtd:enum" value="a">(a) </num><chapeau style="-uslm-dtd:text">In accordance with regulations which the Secretary shall prescribe—</chapeau><footnote id="ID34DFF4402FB64B99BD38448477BD7308" style="-uslm-dtd:footnote"><sup style="-uslm-dtd:superscript">3</sup><content><p style="-uslm-dtd:para; margin-left:1em">Section 1310 as shown above was added by section 7(b) of Public Law 100–517. Such section provided in part as follows: “<quotedText style="-uslm-dtd:quote">Effective 7 years after the date of the enactment of this Act <editorialNote style="-uslm-dtd:legis-comment"><b>[</b>October 24, 1988<b>]</b></editorialNote>, section 1310 (42 U.S.C. 300e–9) is amended to read as follows</quotedText>”.</p> <p style="-uslm-dtd:para; margin-left:1em">Section 7(a)(3) of such Public Law provides that nothing in section 1310 shall be construed to supersede any provision of a collective bargaining agreement in effect on <editorialNote style="-uslm-dtd:legis-comment"><b>[</b>October 24, 1988<b>]</b></editorialNote>.</p> <p style="-uslm-dtd:para; margin-left:1em">Section 9 of such Public Law provides as follows: “<quotedText style="-uslm-dtd:quote">With respect to abortion services, the Secretary of Health and Human Services shall not promulgate or issue any regulations, policy statements, or interpretations or develop any practices concerning the performance of medically necessary procedures if such regulations, policy statements, interpretations, or practices would be inconsistent with those in effect on <editorialNote style="-uslm-dtd:legis-comment"><b>[</b>October 24, 1988<b>]</b></editorialNote>.</quotedText>”.</p></content></footnote> <paragraph style="-uslm-dtd:paragraph" identifier="/us/sComp/78/373/tXIII/s1310/a/1" styleType="OLC"> <num style="-uslm-dtd:enum" value="1">(1) </num><chapeau style="-uslm-dtd:text">each employer—</chapeau> <subparagraph style="-uslm-dtd:subparagraph" identifier="/us/sComp/78/373/tXIII/s1310/a/1/A" styleType="OLC"> <num style="-uslm-dtd:enum" value="A">(A) </num><content style="-uslm-dtd:text">which is required during any calendar quarter to pay its employees the minimum wage prescribed by section 6 of the Fair Labor Standards Act of 1938 (or would be required to pay its employees such wage but for section 13(a) of such Act), and</content> </subparagraph> <subparagraph style="-uslm-dtd:subparagraph" identifier="/us/sComp/78/373/tXIII/s1310/a/1/B" styleType="OLC"> <num style="-uslm-dtd:enum" value="B">(B) </num><content style="-uslm-dtd:text">which during such calendar quarter employed an average number of employees of not less than 25, and</content> </subparagraph> </paragraph> <paragraph style="-uslm-dtd:paragraph" identifier="/us/sComp/78/373/tXIII/s1310/a/2" styleType="OLC"> <num style="-uslm-dtd:enum" value="2">(2) </num><content style="-uslm-dtd:text">any State and each political subdivision thereof which during any calendar quarter employed an average number of employees of not less than 25, as a condition of payment to the State of funds under section 317, 318, or 1002,</content> </paragraph><continuation style="-uslm-dtd:continuation-text" role="subsection">which offers to its employees in the calendar year beginning after such calendar quarter the option of membership in a qualified health maintenance organization which is engaged in the provision of basic health services in a health maintenance organization service area in which at least 25 of such employees reside shall meet the requirements of subsection (b) with respect to any qualified health maintenance organization offered by the employer or State or political subdivision.</continuation></subsection> <subsection style="-uslm-dtd:subsection" identifier="/us/sComp/78/373/tXIII/s1310/b" styleType="OLC"> <num style="-uslm-dtd:enum" value="b">(b)</num><paragraph style="-uslm-dtd:paragraph" identifier="/us/sComp/78/373/tXIII/s1310/b/1" styleType="OLC" class="inline"><num style="-uslm-dtd:enum" value="1">(1) </num><content style="-uslm-dtd:text">If a health benefits plan offered by an employer or a State or political subdivision includes contributions for services offered under the plan, the employer or State or political subdivision shall make a contribution under the plan for services offered by a qualified health maintenance organization in an amount which does not financially discriminate against an employee who enrolls in such organization. For purposes of the preceding sentence, an employer's or a State's or political subdivision's contribution does not financially discriminate if the employer's or State's or political subdivision's method of determining the contributions on behalf of all employees is reasonable and is designed to assure employees a fair choice among health benefits plans.</content></paragraph> <paragraph style="-uslm-dtd:paragraph" identifier="/us/sComp/78/373/tXIII/s1310/b/2" styleType="OLC" class="leftIndentDecrease1"> <num style="-uslm-dtd:enum" value="2">(2) </num><content style="-uslm-dtd:text">Each employer or State or political subdivision which provides payroll deductions as a means of paying employees' contributions for health benefits or which provides a health benefits plan to which an employee contribution is not required shall, with the consent of an employee who exercises option of membership in a qualified health maintenance organization, arrange for the employee's contribution for membership in the organization to be paid through payroll deductions.</content> </paragraph> <paragraph style="-uslm-dtd:paragraph" identifier="/us/sComp/78/373/tXIII/s1310/b/3" styleType="OLC" class="leftIndentDecrease1"> <num style="-uslm-dtd:enum" value="3">(3) </num><content style="-uslm-dtd:text">No employer or State or political subdivision shall be required to pay more for health benefits as a result of the application of this subsection than would otherwise be required by any prevailing collective bargaining agreement or other legally enforceable contract for the provision of health benefits between the employer or State or political subdivision and its employees.</content> </paragraph> </subsection> <subsection style="-uslm-dtd:subsection" identifier="/us/sComp/78/373/tXIII/s1310/c" styleType="OLC"> <num style="-uslm-dtd:enum" value="c">(c) </num><content style="-uslm-dtd:text">For purposes of this section, the term “<term style="-uslm-dtd:term">qualified health maintenance organization</term>” means (1) a health maintenance organization which has provided assurances satisfactory to the Secretary that it provides basic and supplemental health services to its members in the manner prescribed by section 1301(b) and that it is organized and operated in the manner prescribed by section 1301(c), and (2) an entity which proposes to become a health maintenance organization and which the Secretary determines will when it becomes operational provide basic and supplemental health services to its members in the manner prescribed by section 1301(b) and will be organized and operated in the manner prescribed by section 1301(c).</content> </subsection> <subsection style="-uslm-dtd:subsection" identifier="/us/sComp/78/373/tXIII/s1310/d" styleType="OLC"> <num style="-uslm-dtd:enum" value="d">(d)</num><paragraph style="-uslm-dtd:paragraph" identifier="/us/sComp/78/373/tXIII/s1310/d/1" styleType="OLC" class="inline"><num style="-uslm-dtd:enum" value="1">(1) </num><content style="-uslm-dtd:text">Any employer who knowingly does not comply with one or more of the requirements of paragraph (1) or (2) of subsection (b) shall be subject to a civil penalty of not more than $10,000. If such noncompliance continues, a civil penalty may be assessed and collected under this subsection for each thirty-day period such noncompliance continues. Such penalty may be assessed by the Secretary and collected in a civil action brought by the United States in a United States district court.</content></paragraph> <paragraph style="-uslm-dtd:paragraph" identifier="/us/sComp/78/373/tXIII/s1310/d/2" styleType="OLC" class="leftIndentDecrease1"> <num style="-uslm-dtd:enum" value="2">(2) </num><content style="-uslm-dtd:text">In any proceeding by the Secretary to assess a civil penalty under this subsection, no penalty shall be assessed until the employer charged shall have been given notice and an opportunity to present its views on such charge. In determining the amount of the penalty, or the amount agreed upon in compromise, the Secretary shall consider the gravity of the noncompliance and the demonstrated good faith of the employer charged in attempting to achieve rapid compliance after notification by the Secretary of a noncompliance.</content> </paragraph> <paragraph style="-uslm-dtd:paragraph" identifier="/us/sComp/78/373/tXIII/s1310/d/3" styleType="OLC" class="leftIndentDecrease1"> <num style="-uslm-dtd:enum" value="3">(3) </num><content style="-uslm-dtd:text">In any civil action brought to review the assessment of a civil penalty assessed under this subsection, the court shall, at the request of any party to such action, hold a trial de novo on the assessment of such civil penalty and in any civil action to collect such a civil penalty, the court shall, at the request of any party to such action, hold a trial de novo on the assessment of such civil penalty unless in a prior civil action to review the assessment of such penalty the court held a trial de novo on such assessment.</content> </paragraph> </subsection> <subsection style="-uslm-dtd:subsection" identifier="/us/sComp/78/373/tXIII/s1310/e" styleType="OLC"> <num style="-uslm-dtd:enum" value="e">(e) </num><content style="-uslm-dtd:text">For purposes of this section, the term “<term style="-uslm-dtd:term">employer</term>” does not include (1) the Government of the United States, the government of the District of Columbia or any territory or possession of the United States, a State or any political subdivision thereof, or any agency or instrumentality (including the United States Postal Service and Postal Rate Commission) of any of the foregoing, except that such term includes nonappropriated fund instrumentalities of the Government of the United States; or (2) a church, convention or association of churches, or any organization operated, supervised or controlled by a church, convention or association of churches which organization (A) is an organization described in section 501(c)(3) of the Internal Revenue Code of 1986, and (B) does not discriminate (i) in the employment, compensation, promotion, or termination of employment of any personnel, or (ii) in the extension of staff or other privileges to any physician or other health personnel, because such persons seek to obtain or obtained health care, or participate in providing health care, through a health maintenance organization.</content> </subsection> <subsection style="-uslm-dtd:subsection" identifier="/us/sComp/78/373/tXIII/s1310/f" styleType="OLC"> <num style="-uslm-dtd:enum" value="f">(f) </num><content style="-uslm-dtd:text">If the Secretary, after reasonable notice and opportunity for a hearing to a State, finds that it or any of its political subdivisions has failed to comply with paragraph (1) or (2) of subsection (b), the Secretary shall terminate payments to such State under sections 317, 318, and 1002 and notify the Governor of such State that further payments under such sections will not be made to the State until the Secretary is satisfied that there will no longer be any such failure to comply.</content> </subsection> </section> <section style="-uslm-dtd:section" identifier="/us/sComp/78/373/tXIII/s1311" styleType="traditional"> <heading style="-uslm-dtd:header">restrictive state laws and practices </heading> <num style="-uslm-dtd:enum" value="1311">Sec. 1311. </num><editorialNote style="-uslm-dtd:usc-reference" role="uscRef"><b>[</b>300e–10<b>]</b> </editorialNote><subsection style="-uslm-dtd:subsection" identifier="/us/sComp/78/373/tXIII/s1311/a" styleType="OLC" class="inline"><num style="-uslm-dtd:enum" value="a">(a) </num><chapeau style="-uslm-dtd:text">In the case of any entity—</chapeau> <paragraph style="-uslm-dtd:paragraph" identifier="/us/sComp/78/373/tXIII/s1311/a/1" styleType="OLC"> <num style="-uslm-dtd:enum" value="1">(1) </num><chapeau style="-uslm-dtd:text">which cannot do business as a health maintenance organization in a State in which it proposes to furnish basic and supplemental health services because that State by law, regulation, or otherwise—</chapeau> <subparagraph style="-uslm-dtd:subparagraph" identifier="/us/sComp/78/373/tXIII/s1311/a/1/A" styleType="OLC"> <num style="-uslm-dtd:enum" value="A">(A) </num><content style="-uslm-dtd:text">requires as a condition to doing business in that State that a medical society approve the furnishing of services by the entity,</content> </subparagraph> <subparagraph style="-uslm-dtd:subparagraph" identifier="/us/sComp/78/373/tXIII/s1311/a/1/B" styleType="OLC"> <num style="-uslm-dtd:enum" value="B">(B) </num><content style="-uslm-dtd:text">requires that physicians constitute all or a percentage of its governing body,</content> </subparagraph> <subparagraph style="-uslm-dtd:subparagraph" identifier="/us/sComp/78/373/tXIII/s1311/a/1/C" styleType="OLC"> <num style="-uslm-dtd:enum" value="C">(C) </num><content style="-uslm-dtd:text">requires that all physicians or a percentage of physicians in the locale participate or be permitted to participate in the provision of services for the entity,</content> </subparagraph> <subparagraph style="-uslm-dtd:subparagraph" identifier="/us/sComp/78/373/tXIII/s1311/a/1/D" styleType="OLC"> <num style="-uslm-dtd:enum" value="D">(D) </num><content style="-uslm-dtd:text">requires that the entity meet requirements for insurers of health care services doing business in that State respecting initial capitalization and establishment of financial reserves against insolvency, or</content> </subparagraph> <subparagraph style="-uslm-dtd:subparagraph" identifier="/us/sComp/78/373/tXIII/s1311/a/1/E" styleType="OLC"> <num style="-uslm-dtd:enum" value="E">(E) </num><content style="-uslm-dtd:text">imposes requirements which would prohibit the entity from complying with the requirements of this title, and</content> </subparagraph> </paragraph> <paragraph style="-uslm-dtd:paragraph" identifier="/us/sComp/78/373/tXIII/s1311/a/2" styleType="OLC"> <num style="-uslm-dtd:enum" value="2">(2) </num><content style="-uslm-dtd:text">for which a grant, contract, loan, or loan guarantee was made under this title or which is a qualified health maintenance organization for purposes of section 1310 (relating to employees' health benefits plans),</content> </paragraph><continuation style="-uslm-dtd:continuation-text" role="subsection">such requirements shall not apply to that entity so as to prevent it from operating as a health maintenance organization in accordance with section 1301.</continuation></subsection> <subsection style="-uslm-dtd:subsection" identifier="/us/sComp/78/373/tXIII/s1311/b" styleType="OLC"> <num style="-uslm-dtd:enum" value="b">(b) </num><content style="-uslm-dtd:text">No State may establish or enforce any law which prevents a health maintenance organization for which a grant, contract, loan, or loan guarantee was made under this title or which is a qualified health maintenance organization for purposes of section 1310 (relating to employees' health benefits plans), from soliciting members through advertising its services, charges, or other nonprofessional aspects of its operation. This subsection does not authorize any advertising which identifies, refers to, or makes any qualitative judgment concerning, any health professional who provides services for a health maintenance organization.</content> </subsection> <subsection style="-uslm-dtd:subsection" identifier="/us/sComp/78/373/tXIII/s1311/c" styleType="OLC"> <num style="-uslm-dtd:enum" value="c">(c) </num><content style="-uslm-dtd:text">The Secretary shall, within 6 months after the date of the enactment of this subsection, develop a digest of State laws, regulations, and practices pertaining to development, establishment, and operation of health maintenance organizations which shall be updated at least annually and relevant sections of which shall be provided to the Governor of each State annually. Such digest shall indicate which State laws, regulations, and practices appear to be inconsistent with the operation of this section. The Secretary shall also insure that appropriate legal consultative assistance is available to the States for the purpose of complying with the provisions of this section.</content> </subsection> </section> <section style="-uslm-dtd:section" identifier="/us/sComp/78/373/tXIII/s1312" styleType="traditional"> <heading style="-uslm-dtd:header">continued regulation of health maintenance organizations </heading> <num style="-uslm-dtd:enum" value="1312">Sec. 1312. </num><editorialNote style="-uslm-dtd:usc-reference" role="uscRef"><b>[</b>300e–11<b>]</b> </editorialNote><subsection style="-uslm-dtd:subsection" identifier="/us/sComp/78/373/tXIII/s1312/a" styleType="OLC" class="inline"><num style="-uslm-dtd:enum" value="a">(a) </num><chapeau style="-uslm-dtd:text">If the Secretary determines that an entity which received a grant, contract, loan, or loan guarantee under this title as a health maintenance organization or which was included in a health benefits plan offered to employees pursuant to section 1310—</chapeau> <paragraph style="-uslm-dtd:paragraph" identifier="/us/sComp/78/373/tXIII/s1312/a/1" styleType="OLC"> <num style="-uslm-dtd:enum" value="1">(1) </num><content style="-uslm-dtd:text">fails to provide basic and supplemental services to its members,</content> </paragraph> <paragraph style="-uslm-dtd:paragraph" identifier="/us/sComp/78/373/tXIII/s1312/a/2" styleType="OLC"> <num style="-uslm-dtd:enum" value="2">(2) </num><content style="-uslm-dtd:text">fails to provide such services in the manner prescribed by section 1301(b), or</content> </paragraph> <paragraph style="-uslm-dtd:paragraph" identifier="/us/sComp/78/373/tXIII/s1312/a/3" styleType="OLC"> <num style="-uslm-dtd:enum" value="3">(3) </num><content style="-uslm-dtd:text">is not organized or operated in the manner prescribed by section 1301(c),</content> </paragraph><continuation style="-uslm-dtd:continuation-text" role="subsection">the Secretary may take the action authorized by subsection (b).</continuation></subsection> <subsection style="-uslm-dtd:subsection" identifier="/us/sComp/78/373/tXIII/s1312/b" styleType="OLC"> <num style="-uslm-dtd:enum" value="b">(b)</num><paragraph style="-uslm-dtd:paragraph" identifier="/us/sComp/78/373/tXIII/s1312/b/1" styleType="OLC" class="inline"><num style="-uslm-dtd:enum" value="1">(1) </num><content style="-uslm-dtd:text">If the Secretary makes, with respect to any entity which provided assurances to the Secretary under section 1310(d)(1), a determination described in subsection (a), the Secretary shall notify the entity in writing of the determination. Such notice shall specify the manner in which the entity has not complied with such assurances and direct that the entity initiate (within 30 days of the date the notice is issued by the Secretary or within such longer period as the Secretary determines is reasonable) such action as may be necessary to bring (within such period as the Secretary shall prescribe) the entity into compliance with the assurances. If the entity fails to initiate corrective action within the period prescribed by the notice or fails to comply with the assurances within such period as the Secretary prescribes, then after the Secretary provides the entity a reasonable opportunity for reconsideration of his determination, including, at the entity's election, a fair hearing (A) the entity shall not be a qualified health maintenance organization for purposes of section 1310 until such date as the Secretary determines that it is in compliance with the assurances, and (B) each employer which has offered membership in the entity in compliance with section 1310, each lawfully recognized collective bargaining representative or other employee representative which represents the employees of each such employer, and the members of such entity shall be notified by the entity that the entity is not a qualified health maintenance organization for purposes of such section. The notice required by clause (B) of the preceding sentence shall contain, in readily understandable language, the reasons for the determination that the entity is not a qualified health maintenance organization. The Secretary shall publish in the Federal Register each determination referred to in this paragraph.</content></paragraph> <paragraph style="-uslm-dtd:paragraph" identifier="/us/sComp/78/373/tXIII/s1312/b/2" styleType="OLC" class="leftIndentDecrease1"> <num style="-uslm-dtd:enum" value="2">(2) </num><content style="-uslm-dtd:text">If the Secretary makes, with respect to an entity which has received a grant, contract, loan, or loan guarantee under this title, a determination described in subsection (a), the Secretary may, in addition to any other remedies available to him, bring a civil action in the United States district court for the district in which such entity is located to enforce its compliance with the assurances it furnished respecting the provision of basic and supplemental health services or its organization or operation, as the case may be, which assurances were made in connection with its application under this title for the grant, contract, loan, or loan guarantee.</content> </paragraph> </subsection> </section> <section style="-uslm-dtd:section" identifier="/us/sComp/78/373/tXIII/s1313" styleType="traditional"> <heading style="-uslm-dtd:header">limitation on source of funding for health maintenance organizations </heading> <num style="-uslm-dtd:enum" value="1313">Sec. 1313. </num><editorialNote style="-uslm-dtd:usc-reference" role="uscRef"><b>[</b>300e–12<b>]</b> </editorialNote><chapeau style="-uslm-dtd:text">No funds appropriated under any provision of this Act (except as provided in sections 329 and 330) other than this title may be used—</chapeau> <paragraph style="-uslm-dtd:paragraph" identifier="/us/sComp/78/373/tXIII/s1313/1" styleType="OLC"> <num style="-uslm-dtd:enum" value="1">(1) </num><content style="-uslm-dtd:text">for grants or contracts for surveys or other activities to determine the feasibility of developing or expanding health maintenance organizations or other entities which provide, directly or indirectly, health services to a defined population on a prepaid basis;</content> </paragraph> <paragraph style="-uslm-dtd:paragraph" identifier="/us/sComp/78/373/tXIII/s1313/2" styleType="OLC"> <num style="-uslm-dtd:enum" value="2">(2) </num><content style="-uslm-dtd:text">for grants or contracts, or for payments under loan guarantees, for planning projects for the establishment or expansion of such organizations or entities;</content> </paragraph> <paragraph style="-uslm-dtd:paragraph" identifier="/us/sComp/78/373/tXIII/s1313/3" styleType="OLC"> <num style="-uslm-dtd:enum" value="3">(3) </num><content style="-uslm-dtd:text">for grants or contracts, or for payments under loan guarantees, for projects for the initial development or expansion of such organizations or entities; or</content> </paragraph> <paragraph style="-uslm-dtd:paragraph" identifier="/us/sComp/78/373/tXIII/s1313/4" styleType="OLC"> <num style="-uslm-dtd:enum" value="4">(4) </num><content style="-uslm-dtd:text">for loans, or for payments under loan guarantees, to assist in meeting the costs of the initial operation after establishment or expansion of such organizations or entities or in meeting the costs of such organizations in acquiring or constructing ambulatory health care facilities.</content> </paragraph> </section> <section style="-uslm-dtd:section" identifier="/us/sComp/78/373/tXIII/s1315" styleType="traditional"> <heading style="-uslm-dtd:header">annual report </heading> <num style="-uslm-dtd:enum" value="1315">Sec. 1315. </num><editorialNote style="-uslm-dtd:usc-reference" role="uscRef"><b>[</b>300e–14<b>]</b> </editorialNote><subsection style="-uslm-dtd:subsection" identifier="/us/sComp/78/373/tXIII/s1315/a" styleType="OLC" class="inline"><num style="-uslm-dtd:enum" value="a">(a) </num><chapeau style="-uslm-dtd:text">The Secretary shall periodically review the programs of assistance authorized by this title and make an annual report to the Congress of a summary of the activities under each program. The Secretary shall include in such summary—</chapeau> <paragraph style="-uslm-dtd:paragraph" identifier="/us/sComp/78/373/tXIII/s1315/a/1" styleType="OLC"> <num style="-uslm-dtd:enum" value="1">(1) </num><content style="-uslm-dtd:text">a summary of each grant, contract, loan, or loan guarantee made under this title in the period covered by the report and a list of the health maintenance organizations which during such period became qualified health maintenance organizations for purposes of section 1310;</content> </paragraph> <paragraph style="-uslm-dtd:paragraph" identifier="/us/sComp/78/373/tXIII/s1315/a/2" styleType="OLC"> <num style="-uslm-dtd:enum" value="2">(2) </num><content style="-uslm-dtd:text">the statistics and other information reported in such period to the Secretary in accordance with section 1301(c)(11);</content> </paragraph> <paragraph style="-uslm-dtd:paragraph" identifier="/us/sComp/78/373/tXIII/s1315/a/3" styleType="OLC"> <num style="-uslm-dtd:enum" value="3">(3) </num><chapeau style="-uslm-dtd:text">findings with respect to the ability of the health maintenance organizations assisted under this title—</chapeau> <subparagraph style="-uslm-dtd:subparagraph" identifier="/us/sComp/78/373/tXIII/s1315/a/3/A" styleType="OLC"> <num style="-uslm-dtd:enum" value="A">(A) </num><content style="-uslm-dtd:text">to operate on a fiscally sound basis without continued Federal financial assistance,</content> </subparagraph> <subparagraph style="-uslm-dtd:subparagraph" identifier="/us/sComp/78/373/tXIII/s1315/a/3/B" styleType="OLC"> <num style="-uslm-dtd:enum" value="B">(B) </num><content style="-uslm-dtd:text">to meet the requirements of section 1301(c) respecting their organization and operation,</content> </subparagraph> <subparagraph style="-uslm-dtd:subparagraph" identifier="/us/sComp/78/373/tXIII/s1315/a/3/C" styleType="OLC"> <num style="-uslm-dtd:enum" value="C">(C) </num><content style="-uslm-dtd:text">to provide basic and supplemental health services in the manner prescribed by section 1301(b),</content> </subparagraph> <subparagraph style="-uslm-dtd:subparagraph" identifier="/us/sComp/78/373/tXIII/s1315/a/3/D" styleType="OLC"> <num style="-uslm-dtd:enum" value="D">(D) </num><content style="-uslm-dtd:text">to include indigent and high-risk individuals in their membership, and</content> </subparagraph> <subparagraph style="-uslm-dtd:subparagraph" identifier="/us/sComp/78/373/tXIII/s1315/a/3/E" styleType="OLC"> <num style="-uslm-dtd:enum" value="E">(E) </num><content style="-uslm-dtd:text">to provide services to medically underserved populations; and</content> </subparagraph> </paragraph> <paragraph style="-uslm-dtd:paragraph" identifier="/us/sComp/78/373/tXIII/s1315/a/4" styleType="OLC"> <num style="-uslm-dtd:enum" value="4">(4) </num><chapeau style="-uslm-dtd:text">findings with respect to—</chapeau> <subparagraph style="-uslm-dtd:subparagraph" identifier="/us/sComp/78/373/tXIII/s1315/a/4/A" styleType="OLC"> <num style="-uslm-dtd:enum" value="A">(A) </num><content style="-uslm-dtd:text">the operation of distinct categories of health maintenance organizations in comparison with each other,</content> </subparagraph> <subparagraph style="-uslm-dtd:subparagraph" identifier="/us/sComp/78/373/tXIII/s1315/a/4/B" styleType="OLC"> <num style="-uslm-dtd:enum" value="B">(B) </num><content style="-uslm-dtd:text">health maintenance organizations as a group in comparison with alternative forms of health care delivery, and</content> </subparagraph> <subparagraph style="-uslm-dtd:subparagraph" identifier="/us/sComp/78/373/tXIII/s1315/a/4/C" styleType="OLC"> <num style="-uslm-dtd:enum" value="C">(C) </num><content style="-uslm-dtd:text">the impact that health maintenance organizations, individually, by category, and as a group, have on the health of the public.</content> </subparagraph> </paragraph></subsection> <subsection style="-uslm-dtd:subsection" identifier="/us/sComp/78/373/tXIII/s1315/b" styleType="OLC"> <num style="-uslm-dtd:enum" value="b">(b) </num><content style="-uslm-dtd:text">The Office of Management and Budget may review the Secretary's report under subsection (a) before its submission to the Congress, but the Office may not revise the report or delay its submission, and it may submit to the Congress its comments (and those of other departments or agencies of the Government) respecting such report.</content> </subsection> </section> <section style="-uslm-dtd:section" identifier="/us/sComp/78/373/tXIII/s1317" styleType="traditional"> <heading style="-uslm-dtd:header">training and technical assistance </heading> <num style="-uslm-dtd:enum" value="1317">Sec. 1317. </num><editorialNote style="-uslm-dtd:usc-reference" role="uscRef"><b>[</b>300e–16<b>]</b> </editorialNote><subsection style="-uslm-dtd:subsection" identifier="/us/sComp/78/373/tXIII/s1317/a" styleType="OLC" class="inline"><num style="-uslm-dtd:enum" value="a">(a)</num><paragraph style="-uslm-dtd:paragraph" identifier="/us/sComp/78/373/tXIII/s1317/a/1" styleType="OLC" class="inline"><num style="-uslm-dtd:enum" value="1">(1) </num><content style="-uslm-dtd:text">The Secretary shall establish a National Health Maintenance Organization Intern Program (hereinafter in this subsection referred to as the “<quotedText style="-uslm-dtd:quote">Program</quotedText>”) for the purpose of providing training to individuals to become administrators and medical directors of health maintenance organizations or to assume other managerial positions with health maintenance organizations. Under the Program the Secretary may directly provide internships for such training and may make grants to or enter into contracts with health maintenance organizations and other entities to provide such internships.</content></paragraph> <paragraph style="-uslm-dtd:paragraph" identifier="/us/sComp/78/373/tXIII/s1317/a/2" styleType="OLC" class="leftIndentDecrease1"> <num style="-uslm-dtd:enum" value="2">(2) </num><content style="-uslm-dtd:text">No internship may be provided by the Secretary and no grant may be made or contract entered into by the Secretary for the provision of internships unless an application therefor has been submitted to and approved by the Secretary. Such an application shall be in such form and contain such information, and be submitted to the Secretary in such manner, as the Secretary shall prescribe. Section 1306 does not apply to an application submitted under this section.</content> </paragraph> <paragraph style="-uslm-dtd:paragraph" identifier="/us/sComp/78/373/tXIII/s1317/a/3" styleType="OLC" class="leftIndentDecrease1"> <num style="-uslm-dtd:enum" value="3">(3) </num><content style="-uslm-dtd:text">Internships under the Program shall provide for such stipends and allowances (including travel and subsistence expenses and dependency allowances) for the recipients of the internships as the Secretary deems necessary. An internship provided an individual for training at a health maintenance organization or any other entity shall also provide for payments to be made to the organization or other entity for the cost of support services (including the cost of salaries, supplies, equipment, and related items) provided such individual by such organization or other entity. The amount of any such payments to any organization or other entity shall be determined by the Secretary and shall bear a direct relationship to the reasonable costs of the organization or other entity for establishing and maintaining its training programs.</content> </paragraph> <paragraph style="-uslm-dtd:paragraph" identifier="/us/sComp/78/373/tXIII/s1317/a/4" styleType="OLC" class="leftIndentDecrease1"> <num style="-uslm-dtd:enum" value="4">(4) </num><content style="-uslm-dtd:text">Payments under grants under the Program may be made in advance or by way of reimbursement, and at such intervals and on such conditions, as the Secretary finds necessary.</content> </paragraph></subsection> <subsection style="-uslm-dtd:subsection" identifier="/us/sComp/78/373/tXIII/s1317/b" styleType="OLC"> <num style="-uslm-dtd:enum" value="b">(b) </num><content style="-uslm-dtd:text">The Secretary shall provide technical assistance (1) to entities intending to become a qualified health maintenance organization within the meaning of section 1310(d), and (2) to health maintenance organizations. The Secretary may provide such technical assistance through grants to public and nonprofit private entities and contracts with public and private entities.</content> </subsection> <subsection style="-uslm-dtd:subsection" identifier="/us/sComp/78/373/tXIII/s1317/c" styleType="OLC"> <num style="-uslm-dtd:enum" value="c">(c) </num><content style="-uslm-dtd:text">The authority of the Secretary to enter into contracts under subsections (a) and (b) shall be effective for any fiscal year only to such extent or in such amounts as are provided in advance by appropriation Acts.</content> </subsection> </section> <section style="-uslm-dtd:section" identifier="/us/sComp/78/373/tXIII/s1318" styleType="traditional"> <heading style="-uslm-dtd:header">financial disclosure </heading> <num style="-uslm-dtd:enum" value="1318">Sec. 1318. </num><editorialNote style="-uslm-dtd:usc-reference" role="uscRef"><b>[</b>300e–17<b>]</b> </editorialNote><subsection style="-uslm-dtd:subsection" identifier="/us/sComp/78/373/tXIII/s1318/a" styleType="OLC" class="inline"><num style="-uslm-dtd:enum" value="a">(a) </num><chapeau style="-uslm-dtd:text">Each health maintenance organization shall, in accordance with regulations of the Secretary, report to the Secretary financial information which shall include the following:</chapeau> <paragraph style="-uslm-dtd:paragraph" identifier="/us/sComp/78/373/tXIII/s1318/a/1" styleType="OLC"> <num style="-uslm-dtd:enum" value="1">(1) </num><content style="-uslm-dtd:text">Such information as the Secretary may require demonstrating that the health maintenance organization has a fiscally sound operation.</content> </paragraph> <paragraph style="-uslm-dtd:paragraph" identifier="/us/sComp/78/373/tXIII/s1318/a/2" styleType="OLC"> <num style="-uslm-dtd:enum" value="2">(2) </num><content style="-uslm-dtd:text">A copy of the report, if any, filed with the Centers for Medicare & Medicaid Services containing the information required to be reported under section 1124 of the Social Security Act by disclosing entities and the information required to be supplied under section 1902(a)(38) of such Act.</content> </paragraph> <paragraph style="-uslm-dtd:paragraph" identifier="/us/sComp/78/373/tXIII/s1318/a/3" styleType="OLC"> <num style="-uslm-dtd:enum" value="3">(3) </num><chapeau style="-uslm-dtd:text">A description of transactions, as specified by the Secretary, between the health maintenance organization and a party in interest. Such transactions shall include—</chapeau> <subparagraph style="-uslm-dtd:subparagraph" identifier="/us/sComp/78/373/tXIII/s1318/a/3/A" styleType="OLC"> <num style="-uslm-dtd:enum" value="A">(A) </num><content style="-uslm-dtd:text">any sale or exchange, or leasing of any property between the health maintenance organization and a party in interest;</content> </subparagraph> <subparagraph style="-uslm-dtd:subparagraph" identifier="/us/sComp/78/373/tXIII/s1318/a/3/B" styleType="OLC"> <num style="-uslm-dtd:enum" value="B">(B) </num><content style="-uslm-dtd:text">any furnishing for consideration of goods, services (including management services), or facilities between the health maintenance organization and a party in interest, but not including salaries paid to employees for services provided in the normal course of their employment and health services provided to members by hospitals and other providers and by staff, medical group (or groups), individual practice association (or associations), or any combination thereof; and</content> </subparagraph> <subparagraph style="-uslm-dtd:subparagraph" identifier="/us/sComp/78/373/tXIII/s1318/a/3/C" styleType="OLC"> <num style="-uslm-dtd:enum" value="C">(C) </num><content style="-uslm-dtd:text">any lending of money or other extension of credit between a health maintenance organization and a party in interest.</content> </subparagraph> </paragraph><continuation style="-uslm-dtd:continuation-text" role="subsection">The Secretary may require that information reported respecting a health maintenance organization which controls, is controlled by, or is under common control with, another entity be in the form of a consolidated financial statement for the organization and such entity.</continuation></subsection> <subsection style="-uslm-dtd:subsection" identifier="/us/sComp/78/373/tXIII/s1318/b" styleType="OLC"> <num style="-uslm-dtd:enum" value="b">(b) </num><chapeau style="-uslm-dtd:text">For the purposes of this section the term “<term style="-uslm-dtd:term">party in interest</term>” means:</chapeau> <paragraph style="-uslm-dtd:paragraph" identifier="/us/sComp/78/373/tXIII/s1318/b/1" styleType="OLC"> <num style="-uslm-dtd:enum" value="1">(1) </num><content style="-uslm-dtd:text">any director, officer, partner, or employee responsible for management or administration of a health maintenance organization, any person who is directly or indirectly the beneficial owner of more than 5 per centum of the equity of the organization, any person who is the beneficial owner of a mortgage, deed of trust, note, or other interest secured by, and valuing more than 5 per centum of the health maintenance organization, and, in the case of a health maintenance organization organized as a nonprofit corporation, an incorporator or member of such corporation under applicable State corporation law;</content> </paragraph> <paragraph style="-uslm-dtd:paragraph" identifier="/us/sComp/78/373/tXIII/s1318/b/2" styleType="OLC"> <num style="-uslm-dtd:enum" value="2">(2) </num><chapeau style="-uslm-dtd:text">any entity in which a person described in paragraph (1)—</chapeau> <subparagraph style="-uslm-dtd:subparagraph" identifier="/us/sComp/78/373/tXIII/s1318/b/2/A" styleType="OLC"> <num style="-uslm-dtd:enum" value="A">(A) </num><content style="-uslm-dtd:text">is an officer or director;</content> </subparagraph> <subparagraph style="-uslm-dtd:subparagraph" identifier="/us/sComp/78/373/tXIII/s1318/b/2/B" styleType="OLC"> <num style="-uslm-dtd:enum" value="B">(B) </num><content style="-uslm-dtd:text">is a partner (if such entity is organized as a partnership);</content> </subparagraph> <subparagraph style="-uslm-dtd:subparagraph" identifier="/us/sComp/78/373/tXIII/s1318/b/2/C" styleType="OLC"> <num style="-uslm-dtd:enum" value="C">(C) </num><content style="-uslm-dtd:text">has directly or indirectly a beneficial interest of more than 5 per centum of the equity; or</content> </subparagraph> <subparagraph style="-uslm-dtd:subparagraph" identifier="/us/sComp/78/373/tXIII/s1318/b/2/D" styleType="OLC"> <num style="-uslm-dtd:enum" value="D">(D) </num><content style="-uslm-dtd:text">has a mortgage, deed of trust, note, or other interest valuing more than 5 per centum of the assets of such entity;</content> </subparagraph> </paragraph> <paragraph style="-uslm-dtd:paragraph" identifier="/us/sComp/78/373/tXIII/s1318/b/3" styleType="OLC"> <num style="-uslm-dtd:enum" value="3">(3) </num><content style="-uslm-dtd:text">any person directly or indirectly controlling, controlled by, or under common control with a health maintenance organization; and</content> </paragraph> <paragraph style="-uslm-dtd:paragraph" identifier="/us/sComp/78/373/tXIII/s1318/b/4" styleType="OLC"> <num style="-uslm-dtd:enum" value="4">(4) </num><content style="-uslm-dtd:text">any spouse, child, or parent of an individual described in paragraph (1).</content> </paragraph> </subsection> <subsection style="-uslm-dtd:subsection" identifier="/us/sComp/78/373/tXIII/s1318/c" styleType="OLC"> <num style="-uslm-dtd:enum" value="c">(c) </num><content style="-uslm-dtd:text">Each health maintenance organization shall make the information reported pursuant to subsection (a) available to its enrollees upon reasonable request.</content> </subsection> <subsection style="-uslm-dtd:subsection" identifier="/us/sComp/78/373/tXIII/s1318/d" styleType="OLC"> <num style="-uslm-dtd:enum" value="d">(d) </num><content style="-uslm-dtd:text">The Secretary shall, as he deems necessary, conduct an evaluation of transactions reported to the Secretary under subsection (a)(3) for the purpose of determining their adverse impact, if any, on the fiscal soundness and reasonableness of charges to the health maintenance organization with respect to which they transpired. The Secretary shall evaluate the reported transactions of not less than five, or if there are more than twenty health maintenance organizations reporting such transactions, not less than one-fourth of the health maintenance organizations reporting any such transactions under subsection (a)(3).</content> </subsection> <subsection style="-uslm-dtd:subsection" identifier="/us/sComp/78/373/tXIII/s1318/f" styleType="OLC"> <num style="-uslm-dtd:enum" value="f">(f)<ref style="-uslm-dtd:footnote-ref" idref="IDC27C9721D0C04D02A2C8CE70B3BDB465" class="footnoteRef">4</ref> </num><content style="-uslm-dtd:text">Nothing in this section shall be construed to confer upon the Secretary any authority to approve or disapprove the rates charged by any health maintenance organization.</content><footnote id="IDC27C9721D0C04D02A2C8CE70B3BDB465" style="-uslm-dtd:footnote"><sup style="-uslm-dtd:superscript">4</sup><p style="-uslm-dtd:para; margin-left:1em">Subsection (e) was repealed by section 810 of Public Law 99–660.</p></footnote> </subsection> <subsection style="-uslm-dtd:subsection" identifier="/us/sComp/78/373/tXIII/s1318/g" styleType="OLC"> <num style="-uslm-dtd:enum" value="g">(g) </num><content style="-uslm-dtd:text">Any health maintenance organization failing to file with the Secretary the annual financial statement required in subsection (a) shall be ineligible for any Federal assistance under this title until such time as such statement is received by the Secretary and shall not be a qualified health maintenance organization for purposes of section 1310.</content> </subsection> <subsection style="-uslm-dtd:subsection" identifier="/us/sComp/78/373/tXIII/s1318/h" styleType="OLC"> <num style="-uslm-dtd:enum" value="h">(h) </num><content style="-uslm-dtd:text">Whoever knowingly and willfully makes or causes to be made any false statement or representation of a material fact in any statement filed pursuant to this section shall be guilty of a felony and upon conviction thereof shall be fined not more than $25,000 or imprisoned for not more than five years, or both.</content> </subsection> </section>