[Congressional Bills 103th Congress]
[From the U.S. Government Publishing Office]
[S. 1215 Introduced in Senate (IS)]

103d CONGRESS
  1st Session
                                S. 1215

 To increase the number of primary care providers in order to improve 
the nation's health care access and contain health care spending by the 
  establishment of medical education reimbursement programs and other 
                   programs, and for other purposes.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                             July 13, 1993

 Mrs. Kassebaum (for herself and Mr. Simpson) introduced the following 
  bill; which was read twice and referred to the Committee on Finance

_______________________________________________________________________

                                 A BILL


 
 To increase the number of primary care providers in order to improve 
the nation's health care access and contain health care spending by the 
  establishment of medical education reimbursement programs and other 
                   programs, and for other purposes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

    (a) Short Title.--This Act may be cited as the ``Primary Medical 
Care Act of 1993''.
    (b) Table of Contents.--The table of contents is as follows:

Sec. 1. Short title; table of contents.
        TITLE I--INCREASING THE NUMBER OF PRIMARY CARE PROVIDERS

Sec. 101. Findings.
Sec. 102. Graduate medical education payments.
Sec. 103. Approval of primary care and health care consortium programs 
                            for GME payments.
Sec. 104. Health professions funding for nurse practitioner and 
                            physician assistants programs.
Sec. 105. Primary care demonstration grants.
Sec. 106. Health workforce oversight.
             TITLE II--COMMUNITY HEALTH SERVICES EXPANSION

Sec. 201. Establishment of grant program.
Sec. 202. Program to provide for expansion of federally qualified 
                            health centers.
 TITLE III--EXPANDING THE SUPPLY OF HEALTH PROFESSIONALS IN RURAL AREAS

Sec. 301. Expansion of National Health Service Corps.
Sec. 302. Tax incentives for practice in rural areas.
                   TITLE IV--MISCELLANEOUS PROVISIONS

Sec. 401. Effective date.

        TITLE I--INCREASING THE NUMBER OF PRIMARY CARE PROVIDERS

SEC. 101. FINDINGS.

    Congress finds that--
            (1) not less than 50 percent of all medical residents 
        should complete generalist training programs, and at least 50 
        percent of all physicians should become primary care providers;
            (2) all primary care shortage areas should be eliminated, 
        and disparities between the metropolitan and nonmetropolitan 
        distribution of physicians should be reduced;
            (3) the aggregate allopathic and osteopathic physician-to-
        population ratio should be maintained at 1993 levels;
            (4) the total number of entry medical residency positions 
        should be limited;
            (5) the number of nurse practitioners and physician 
        assistants should be increased; and
            (6) community-based ambulatory training experiences for 
        medical residents should be increased.

SEC. 102. GRADUATE MEDICAL EDUCATION PAYMENTS.

    (a) In General.--Subsection (h) of section 1886 of the Social 
Security Act (42 U.S.C. 1395ww(h)) is amended to read as follows:
    ``(h) Graduate Medical Education Payments.--
            ``(1) National health workforce education fund.--
                    ``(A) Establishment.--The Secretary shall establish 
                a National Health Workforce Education Fund (hereafter 
                referred to in this subsection as the `Fund') to make 
                payments in accordance with this subsection.
                    ``(B) Allocations.--
                            ``(i) In general.--In providing for the 
                        Fund, the Secretary shall annually provide for 
                        an allocation of monies to the Fund from the 
                        trust funds established under parts A and B as 
                        the Secretary determines reasonably reflects 
                        the amount of DME payments and IME payments 
                        payable under such funds during fiscal year 
                        1993.
                            ``(ii) Updating to the first cost reporting 
                        period.--The Secretary shall update the amount 
                        of funds allocated to the Fund under clause (i) 
                        by the percentage increase in the consumer 
                        price index during the 12-month cost reporting 
                        period described in such clause.
                            ``(iii) Amount for subsequent cost 
                        reporting periods.--For each cost reporting 
                        period, the amount of funds allocated to the 
                        Fund shall be equal to the amount determined 
                        under this subparagraph for the previous cost 
                        reporting period updated, through the midpoint 
                        of the period, by projecting the estimated 
                        percentage change in the consumer price index 
                        during the 12-month period ending at that 
                        midpoint, with appropriate adjustments to 
                        reflect previous under- or over-estimations 
                        under this subparagraph in the projected 
                        percentage change in the consumer price index.
                    ``(C) Division of fund.--The Secretary shall 
                annually divide the Fund into subfunds. One subfund 
                shall be established for DME payments (hereafter 
                referred to in this subsection as the `DME subfund') 
                and another subfund for IME payments (hereafter 
                referred to in this subsection as the `IME subfund'). 
                In determining the annual relative distribution of 
                funds between the DME subfund and the IME subfund, the 
                Secretary shall first consider the amount to be 
                contained in the DME subfund. The IME subfund shall be 
                equal to the amount of the Fund less the amount of the 
                DME subfund.
                    ``(D) Determination of amount of dme subfund.--The 
                Secretary shall annually determine the amount of the 
                DME subfund. For the first cost reporting period, the 
                DME subfund shall be equal to the amount of DME 
                payments under parts A and B in 1993, updated by the 
                percentage increase in the consumer price index during 
                that 12-month cost reporting period. For subsequent 
                cost reporting periods, such subfund shall be the 
                greater of--
                            ``(i) the amount of DME payments made from 
                        the Fund during the previous cost reporting 
                        period updated, through the midpoint of the 
                        period, by projecting the estimated percentage 
                        change in the consumer price index during the 
                        12-month period ending at that midpoint, with 
                        appropriate adjustments to reflect previous 
                        under- or over-estimations under this 
                        subparagraph in the projected percentage change 
                        in the consumer price index; or
                            ``(ii) the projected amount of DME payments 
                        for such cost reporting period required for all 
                        primary care residents and health care training 
                        consortia residents in programs approved by the 
                        Administrator of the Health Resources and 
                        Services Administration.
            ``(3) Guidelines for disbursement of graduate medical 
        education funds.--
                    ``(A) DME payments.--
                            ``(i) Amount of payment per fte resident.--
                        The Secretary shall develop a payment amount 
                        per FTE resident, with respect to DME payments, 
                        that is not historically based, but shall 
                        accurately reflect the resident stipends, 
                        clinical faculty stipends, administrative 
                        expenses, and program operation overhead 
                        involved. The Secretary shall develop such a 
                        formula based upon a national average of such 
                        payments during the cost reporting period that 
                        ended in 1993.
                            ``(ii) Updating to the first cost reporting 
                        period.--The Secretary shall update the payment 
                        amount per FTE resident determined under clause 
                        (i) by the percentage increase in the consumer 
                        price index during the 12-month cost reporting 
                        period described in such clause.
                            ``(iii) Amount for subsequent cost 
                        reporting periods.--For each cost reporting 
                        period, the approved payment amount per FTE 
                        resident shall be equal to the amount 
                        determined under this subparagraph for the 
                        previous cost reporting period updated, through 
                        the midpoint of the period, by projecting the 
                        estimated percentage change in the consumer 
                        price index during the 12-month period ending 
                        at that midpoint, with appropriate adjustments 
                        to reflect previous under- or over-estimations 
                        under this subparagraph in the projected 
                        percentage change in the consumer price index.
                    ``(B) Health care training institution payment 
                amount per resident.--
                            ``(i) In general.--The payment amount, for 
                        a health care training institution's cost 
                        reporting period shall be equal to the product 
                        of--
                                    ``(I) the aggregate approved amount 
                                (as defined in clause (ii)) for that 
                                period; and
                                    ``(II) the health care training 
                                institution's medicare patient load (as 
                                defined in clause (iii)) for that 
                                period.
                            ``(ii) Aggregate approved amount.--As used 
                        in clause (i), the term `aggregate approved 
                        amount' means, for a health care training 
                        institution cost reporting period, the product 
                        of--
                                    ``(I) the payment amount per FTE 
                                resident amount (as determined under 
                                subparagraph (A)) for that period; and
                                    ``(II) the weighted average number 
                                of FTE (as determined under 
                                subparagraph (C)) in the health care 
                                training institution's approved medical 
                                residency training programs in that 
                                period.
                            ``(iii) Medicare patient load.--As used in 
                        clause (i), the term `medicare patient load' 
                        means, with respect to a health care training 
                        consortium's or a teaching hospital's cost 
                        reporting period, the fraction of the total 
                        number of inpatient-bed-days (as established by 
                        the Secretary) during the period which are 
                        attributable to patients with respect to whom 
                        payment may be under part A. For the purpose of 
                        this clause, for a health care training 
                        consortium, the fraction of the total number of 
                        inpatient-bed-days shall be calculated using 
                        the inpatient-bed-days of the teaching 
                        hospitals which are members of the consortium.
                    ``(C) Determination of full-time equivalent 
                residents.--
                            ``(i) Rules.--The Secretary shall establish 
                        rules consistent with this subparagraph for the 
                        computation of the number of FTE residents in 
                        an approved medical residency training program.
                            ``(ii) Adjustment for part-year or part-
                        time residents.--Such rules shall take into 
                        account individuals who serve as residents for 
                        only a portion of a period with a hospital or 
                        simultaneously with more than one hospital.
                            ``(iii) Weighting factors.--Subject to 
                        clause (iv), such rules shall provide that, in 
                        calculating the number of FTE residents in an 
                        approved residency program for a resident who 
                        is in the resident's initial residency period--
                                    ``(I) with respect to each primary 
                                care resident in a primary care 
                                training program approved by the 
                                Administrator of the Health Resources 
                                and Services Administration, the 
                                weighting factor is 1.5;
                                    ``(II) with respect to each 
                                nonprimary care resident in a training 
                                program which is part of a health care 
                                training consortia, approved by the 
                                Administrator of the Health Resources 
                                and Services Administration, the 
                                weighting factor is 1.0; and
                                    ``(III) with respect to each 
                                nonprimary care resident in a training 
                                program that is not part of a health 
                                care training consortia approved by the 
                                Administrator of the Health Resources 
                                and Services Administration, the 
                                weighting factor shall be the ratio of 
                                the subspecialty total divided by the 
                                product of the payment amount per FTE 
                                resident and the total number of 
                                residents who do not train in programs 
                                approved under section 753 of the 
                                Public Health Service Act as a primary 
                                care training program or a health care 
                                training consortium.
                        The subspecialty total for purposes of 
                        subclause (III) shall be the sum determined by 
                        subtracting the amount of DME payments that 
                        would be needed to provide reimbursements for 
                        residents who train in programs approved, under 
                        section 753 of the Public Health Service Act as 
                        a primary care training program or a health 
                        care training consortium from the amount of the 
                        DME subfund.
                            ``(iv) Foreign medical graduates required 
                        to pass fmgems examination.--Such rules shall 
                        provide that, in the case of an individual who 
                        is a foreign medical graduate, the individual 
                        shall not be counted as a resident, unless--
                                    ``(I) the individual has passed the 
                                FMGEMS examination; or
                                    ``(II) the individual has 
                                previously received certification from, 
                                or has previously passed the 
                                examination of, the Educational 
                                Commission for Foreign Medical 
                                Graduates.
                            ``(v) Counting time spent in outpatient 
                        settings.--Such rules shall provide that only 
                        time spent in activities relating to patient 
                        care shall be counted and that all the time so 
                        spent by a resident under an approved medical 
                        residency training program shall be counted 
                        towards the determination of full-time 
                        equivalency, without regard to the setting in 
                        which the activities are performed.
                    ``(D) Assurances.--In disbursing DME payments from 
                the Fund, the Secretary, shall ensure that following:
                            ``(i) A teaching hospital receiving DME 
                        payments from the Fund for its residents, other 
                        than those residents that are part of a health 
                        care training consortium, uses those funds to 
                        support the training of medical residents.
                            ``(ii) A health care training consortium 
                        receiving DME payments may use such funds, at 
                        the sole discretion of such consortium, to 
                        support the training of medical students and 
                        medical residents to meet the training outcome 
                        requirements as described under section 753 of 
                        the Public Health Service Act.
                            ``(iii) Assurances are obtained from the 
                        health care training consortia or teaching 
                        hospitals receiving such DME payments that such 
                        entities will compensate the appropriate 
                        primary care residents at not less than an 
                        amount that is 20 percent greater than the 
                        compensation paid to other residents.
                    ``(E) Compensation.--As used in subparagraph 
                (D)(iii), the term `compensation' means the total of 
                salary, benefits, debt forgiveness, and all other 
                presentations provided to residents, both monetary and 
                material. Payments made to residents by a residency 
                program either prior to or following the actual period 
                of residency shall also be considered as compensation 
                under this section.
            ``(4) Determination as to funding of programs.--The 
        Secretary shall, with respect to weighting factors for primary 
        care training programs and health care training consortia under 
        paragraph (3), use only such weights for programs or consortia 
        approved by the Administrator of the Health Resources and 
        Services Administration under section 753 of the Public Health 
        Service Act.
            ``(5) Definitions.--As used in this subsection:
                    ``(A) Approved medical residency training 
                program.--The term `approved medical residency training 
                program' means a residency or other postgraduate 
                medical training program in which participation may be 
                counted toward certification in a specialty or 
                subspecialty and includes formal postgraduate training 
                programs in geriatric medicine approved by the 
                Secretary.
                    ``(B) Consumer price index.--The term `consumer 
                price index' refers to the Consumer Price Index for All 
                Urban Consumers (United States city average), as 
                published by the Secretary of Commerce.
                    ``(C) Direct medical education payments; dme.--The 
                term `direct medical education payments' means payments 
                to a health care training institution that sponsors a 
                residency program, to enable such institution to 
                provide--
                            ``(i) resident and fellow stipends;
                            ``(ii) the salaries of clinical faculty;
                            ``(iii) administrative expenses; and
                            ``(iv) reimbursement for overhead expenses 
                        incurred for residency and fellowship physician 
                        training.
                    ``(D) Foreign medical graduate.--The term `foreign 
                medical graduate' means a resident who is not a 
                graduate of--
                            ``(i) a school of medicine accredited by 
                        the Liaison Committee on Medical Education of 
                        the American Medical Colleges (or approved by 
                        such Committee as meeting the standards 
                        necessary for such accreditation);
                            ``(ii) a school of osteopathy accredited by 
                        the American Osteopathic Association, or 
                        approved by such Association as meeting the 
                        standards necessary for such accreditation; or
                            ``(iii) a school of dentistry or podiatry 
                        that is accredited (or meets the standards for 
                        accreditation) by an organization recognized by 
                        the Secretary for such purpose.
                    ``(E) FMGEMS examination.--The term `FMGEMS 
                examination' means parts I and II of the Foreign 
                Medical Graduate Examination in the Medical Sciences 
                recognized by the Secretary for this purpose.
                    ``(F) Generalists.--The term `generalists' means 
                family physicians, general pediatricians, and general 
                internists.
                    ``(G) Health care training consortium.--
                            ``(i) In general.--The term `health care 
                        training consortium' means a local, State, or 
                        regional association approved by the 
                        Administrator of the Health Resources and 
                        Services Administration under section 753 of 
                        the Public Health Service Act, that includes at 
                        least one school of medicine, teaching 
                        hospital, and ambulatory training site, 
                        organized in a manner so that at least 50 
                        percent of the involved medical school's or 
                        schools' graduates become primary care 
                        providers during the year after such graduates 
                        complete their residency training.
                            ``(ii) Ambulatory training sites.--As used 
                        in clause (i), the term `ambulatory training 
                        sites' includes health maintenance 
                        organizations, community health centers and 
                        federally qualified health centers, migrant 
                        health centers, ambulatory offices or other 
                        appropriate educational and teaching sites as 
                        determined by the Administrator of the Health 
                        Resources and Services Administration.
                    ``(H) Health care training institution.--The term 
                `health care training institution' means a teaching 
                hospital or a health care training consortium.
                    ``(I) Indirect medical education payments; ime.--
                The term `indirect medical education payments' means 
                payments to teaching hospitals to enable such hospitals 
                to pay the additional operating costs associated with 
                the training of medical residents under section 
                1886(d)(5)(B). Such payments shall be referred to as 
                `IME payments'.
                    ``(J) Initial residency period.--(i) The term 
                `initial residency period' means the period of board 
                eligibility. Except as provided in clause (ii), in no 
                case shall the initial period of residency exceed an 
                aggregate period of formal training of more than five 
                years for any individual. The initial residency period 
                shall be determined, with respect to a resident, as of 
                the time the resident enters the residency training 
                program.
                    ``(ii) Notwithstanding clause (i), a period, of not 
                more than two years, during which an individual is in a 
                geriatric residency or fellowship program that meets 
                such criteria as the Secretary may establish, shall be 
                treated as part of the initial residency period, but 
                shall not be counted against any limitation on the 
                initial residency period.
                    ``(K) Period of board eligibility.--
                            ``(i) General rule.--Subject to clauses 
                        (ii) and (iii), the term `period of board 
                        eligibility' means, for a resident, the minimum 
                        number of years of formal training necessary to 
                        satisfy the requirements for initial board 
                        eligibility in the particular specialty for 
                        which the resident is training.
                            ``(ii) Application of directory.--Except as 
                        provided in clause (iii), the period of board 
                        eligibility shall be such period specified in 
                        the Directory of Residency Training Programs 
                        published by the Accreditation Council on 
                        Graduate Medical Education.
                            ``(iii) Changes in period of board 
                        eligibility.--If the Accreditation Council on 
                        Graduate Medical Education, in its Directory of 
                        Residency Training Programs--
                                    ``(I) increases the minimum number 
                                of years of formal training necessary 
                                to satisfy the requirements for a 
                                specialty, above the period specified 
                                in its 1993-1994 Directory, the 
                                Secretary may increase the period of 
                                board eligibility for that specialty, 
                                but not to exceed the period of board 
                                eligibility specified in that later 
                                Directory; or
                                    ``(II) decreases the minimum number 
                                of years of formal training necessary 
                                to satisfy the requirements for a 
                                specialty, below the period specified 
                                in its 1993-1994 Directory, the 
                                Secretary may decrease the period of 
                                board eligibility for that specialty, 
                                but not below the period of board 
                                eligibility specified in that later 
                                Directory.
                    ``(L) Primary care.--The term `primary care' means 
                medical care that is characterized by the following 
                elements:
                            ``(i) First contact care for persons with 
                        undifferentiated health care concerns.
                            ``(ii) Person-centered, comprehensive care 
                        that is not organ or problem specific.
                            ``(iii) An orientation toward the 
                        longitudinal care of the patient.
                            ``(iv) Responsibility for coordination of 
                        other health services as they relate to the 
                        patient's care.
                    ``(M) Primary care competencies.--The term `primary 
                care competencies' means--
                            ``(i) health promotion and disease 
                        prevention;
                            ``(ii) the assessment or evaluation of 
                        common symptoms and physical signs;
                            ``(iii) the management of common acute and 
                        chronic medical conditions, including 
                        behavioral conditions; or
                            ``(iv) the identification and appropriate 
                        referral for other needed health care services.
                    ``(N) Primary care providers.--The term `primary 
                care providers' means generalists and obstetrician/
                gynecologists, nurse practitioners, and physician 
                assistants who utilize the primary care competencies to 
                deliver primary care.
                    ``(O) Primary care residents.--The term `primary 
                care residents' means medical residents in primary care 
                training programs.
                    ``(P) Primary care training programs.--The term 
                `primary care training programs' means--
                            ``(i) all family practice residency 
                        programs; and
                            ``(ii) residency programs for primary care 
                        providers that are approved by the 
                        Administrator of the Health Resources and 
                        Services Administration in accordance with 
                        section 753 of the Public Health Service 
                        Act.''.
    (b) IME Payments.--Subparagraph (B) of section 1886(d)(5) of the 
Social Security Act (42 U.S.C. 1395ww(d)(5)(B)) is amended--
            (1) in the matter preceding clause (i), by inserting ``(IME 
        payments under subsection (h)), from the IME subfund 
        established in subsection (h),'' after ``medical education,''; 
        and
            (2) by adding at the end thereof the following new clause:
            ``(v) In determining the additional payment amount, the 
        Secretary shall reduce the amount of IME payments to teaching 
        hospitals for a hospital cost reporting period by an 
        appropriate across-the-board percentage, in order to maintain 
        IME subfund budget neutrality if--
                    ``(I) such payments for resident provided services 
                are projected to increase during the hospital cost 
                reporting period; or
                    ``(II) the amount of such subfund is reduced in 
                accordance with subsection (h)(1)(C).''.

SEC. 103. APPROVAL OF PRIMARY CARE AND HEALTH CARE CONSORTIUM PROGRAMS 
              FOR GME PAYMENTS.

    Part C of title VII of the Public Health Service Act (42 U.S.C. 
293j et seq.) is amended by adding at the end thereof the following new 
section:

``SEC. 753. APPROVAL OF PRIMARY CARE AND HEALTH CARE CONSORTIUM 
              PROGRAMS FOR GME PAYMENTS.

    ``(a) In General.--
            ``(1) Requirements.--The Secretary, acting through the 
        Administrator of the Health Resources and Services 
        Administration, shall, for purposes of section 1886(h) of the 
        Social Security Act--
                    ``(A) establish criteria, based upon program 
                curricula, that shall be utilized to determine which 
                residencies in pediatrics, internal medicine, and 
                obstetrics and gynecology shall be approved as primary 
                care training programs;
                    ``(B) approve primary care training programs, using 
                the criteria established in paragraph (2); and
                    ``(C) approve health care training consortium in 
                accordance with paragraph (2).
            ``(2) Transition.--
                    ``(A) In general.--During the period ending on June 
                30, 1997, a health care training consortium shall be 
                approved if the consortium demonstrates that not less 
                than 50 percent of the filled residency program 
                positions of such consortium are in primary care 
                training programs.
                    ``(B) 1997-2001.--During the period beginning July 
                1, 1997, through June 30, 2001, a health care training 
                consortium shall be approved if the consortium 
                demonstrates that not less than 50 percent of the 
                filled residency program positions of such consortium 
                are in primary care training programs and not less than 
                50 percent of the medical school graduates from such 
                health care training consortium with respect to the 
                year involved enter primary care training programs.
                    ``(C) Post 2001.--For each annual period beginning 
                on July 1, 2001, health care training consortium shall 
                be approved if such consortium demonstrates that not 
                less than 50 percent of the 1997 graduates, and each 
                subsequent class of graduates, from the consortium 
                medical school or medical schools have become primary 
                care providers.
    ``(b) Definitions.--As used in this section:
            ``(1) Generalists.--The term `generalists' means family 
        physicians, general pediatricians, and general internists.
            ``(2) Health care training consortium.--
                    ``(A) In general.--The term `health care training 
                consortium' means a local, State, or regional 
                association approved by the Administrator of the Health 
                Resources and Services Administration that includes at 
                least one school of medicine, teaching hospital, and 
                ambulatory training site, organized in a manner so that 
                at least 50 percent of the involved medical school's or 
                schools' graduates become primary care providers during 
                the year after such graduates complete their residency 
                training.
                    ``(B) Ambulatory training sites.--As used in 
                subparagraph (A), the term `ambulatory training sites' 
                includes health maintenance organizations, community 
                health centers and federally qualified health centers, 
                migrant health centers, ambulatory offices or other 
                appropriate educational and teaching sites as 
                determined by the Administrator of the Health Resources 
                and Services Administration.
            ``(3) Primary care.--The term `primary care' means medical 
        care that is characterized by the following elements:
                    ``(A) First contact care for persons with 
                undifferentiated health care concerns.
                    ``(B) Person-centered, comprehensive care that is 
                not organ or problem specific.
                    ``(C) An orientation toward the longitudinal care 
                of the patient.
                    ``(D) Responsibility for coordination of other 
                health services as they relate to the patient's care.
            ``(4) Primary care competencies.--The term `primary care 
        competencies' means--
                    ``(A) health promotion and disease prevention;
                    ``(B) the assessment or evaluation of common 
                symptoms and physical signs;
                    ``(C) the management of common acute and chronic 
                medical conditions, including behavioral conditions; or
                    ``(D) the identification and appropriate referral 
                for other needed health care services.
            ``(5) Primary care providers.--The term `primary care 
        providers' means generalists and obstetrician/gynecologists, 
        nurse practitioners, and physician assistants who utilize the 
        primary care competencies to deliver primary care.
            ``(6) Primary care residents.--The term `primary care 
        residents' means medical residents in primary care training 
        programs.
            ``(7) Primary care training programs.--The term `primary 
        care training programs' means--
                    ``(A) all family practice residency programs; and
                    ``(B) residency programs for primary care providers 
                that are approved by the Administrator of the Health 
                Resources and Service Administrator in accordance with 
                this section.''.

SEC. 104. HEALTH PROFESSIONS FUNDING FOR NURSE PRACTITIONER AND 
              PHYSICIAN ASSISTANTS PROGRAMS.

    (a) Physician Assistants.--Section 750(d)(1) of the Public Health 
Service Act (42 U.S.C. 293n(d)(1)) is amended by striking ``for each of 
the fiscal years 1993 through 1995'' and inserting ``for fiscal year 
1993, $11,250,000 for fiscal year 1994, and such sums as may be 
necessary for each of the fiscal years 1995 and 1996''.
    (b) Nurse Practitioners.--Section 822(d) of such Act (42 U.S.C. 
296m(d)) is amended by striking ``for each of the fiscal years 1993 and 
1994'' and inserting ``for fiscal year 1993, $25,000,000 for fiscal 
year 1994, and such sums as may be necessary for each of the fiscal 
years 1995 and 1996''.

SEC. 105. PRIMARY CARE DEMONSTRATION GRANTS.

    Part B of title III of the Public Health Service Act (42 U.S.C. 243 
et seq.) is amended by adding at the end thereof the following new 
section:

``SEC. 320A. PRIMARY CARE DEMONSTRATION GRANTS.

    ``(a) Authorization.--The Secretary, acting through the Health 
Resources and Services Administration, shall award grants to States or 
nonprofit entities to fund not less than 10 demonstration projects to 
enable such States or entities to evaluate one or more of the 
following:
            ``(1) State mechanisms, including changes in the scope of 
        practice laws, to enhance the delivery of primary care by nurse 
        practitioners or physician assistants.
            ``(2) The feasibility of, and the most effective means to 
        train subspecialists to deliver primary care as primary care 
        providers.
            ``(3) State mechanisms to increase the supply or improve 
        the distribution of primary care providers.
    ``(b) Application.--To be eligible to receive a grant under this 
section a State or nonprofit entity shall prepare and submit to the 
Secretary an application at such time, in such manner and containing 
such information as the Secretary may require.
    ``(c) Authorization of Appropriations.--There are authorized to be 
appropriated to carry out this section, $9,000,000 for fiscal year 
1994, and such sums as may be necessary for each of the fiscal years 
1995 through 1997.''.

SEC. 106. HEALTH WORKFORCE OVERSIGHT.

    (a) In General.--Section 301(a) of the Health Professions Education 
Extension Amendments of 1992 (42 U.S.C. 295k note) is amended--
            (1) in paragraph (1), by striking ``and'' at the end 
        thereof;
            (2) in paragraph (2), by striking the period and inserting 
        ``; and''; and
            (3) by adding at the end thereof the following new 
        paragraph:
            ``(3) maintain data bases concerning the supply and 
        distribution of, and postgraduate training programs for, 
        physicians and other primary care providers in the United 
        States in order to make periodic recommendations with respect 
        to subparagraphs (D) and (E) of paragraph (1).''.
    (b) Final Report.--Section 301(j) of such Act is amended--
            (1) by striking ``Final'' in the subsection heading; and
            (2) by striking ``final''.
    (c) Authorization of Appropriations.--Section 301(k) of such Act is 
amended to read as follows:
    ``(k) Authorization of Appropriations.--There are authorized to be 
appropriated to maintain the data bases required under subsection 
(a)(3), and for other purposes authorized by this section, $8,000,000 
for fiscal year 1994, and such sums as may be necessary for each of the 
fiscal years 1995 through 1997.''.

             TITLE II--COMMUNITY HEALTH SERVICES EXPANSION

SEC. 201. ESTABLISHMENT OF GRANT PROGRAM.

    Subpart I of part D of title III of the Public Health Service Act 
(42 U.S.C. 254b et seq.) is amended by adding at the end thereof the 
following new section:

``SEC. 330A. COMMUNITY-BASED PRIMARY HEALTH CARE GRANT PROGRAM.

    ``(a) Establishment.--The Secretary shall establish and administer 
a program to provide allotments to States to enable such States to 
provide grants for the creation or enhancement of community-based 
primary health care entities that provide services to low-income or 
medically underserved populations.
    ``(b) Allotments to States.--
            ``(1) In general.--From the amount available for allotment 
        under subsection (h) for a fiscal year, the Secretary shall 
        allot to each State an amount equal to the product of the grant 
        share of the State (as determined under paragraph (2)) 
        multiplied by such amount available.
            ``(2) Grant share.--
                    ``(A) In general.--For purposes of paragraph (1), 
                the grant share of a State shall be the product of the 
                need-adjusted population of the State (as determined 
                under subparagraph (B)) multiplied by the Federal 
                matching percentage of the State (as determined under 
                subparagraph (C)), expressed as a percentage of the sum 
                of the products of such factors for all States.
                    ``(B) Need-adjusted population.--
                            ``(i) In general.--For purposes of 
                        subparagraph (A), the need-adjusted population 
                        of a State shall be the product of the total 
                        population of the State (as estimated by the 
                        Secretary of Commerce) multiplied by the need 
                        index of the State (as determined under clause 
                        (ii)).
                            ``(ii) Need index.--For purposes of clause 
                        (i), the need index of a State shall be the 
                        ratio of--
                                    ``(I) the weighted sum of the 
                                geographic percentage of the State (as 
                                determined under clause (iii)), the 
                                poverty percentage of the State (as 
                                determined under clause (iv)), and the 
                                multiple grant percentage of the State 
                                (as determined under clause (v)); to
                                    ``(II) the general population 
                                percentage of the State (as determined 
                                under clause (vi)).
                            ``(iii) Geographic percentage.--
                                    ``(I) In general.--For purposes of 
                                clause (ii)(I), the geographic 
                                percentage of the State shall be the 
                                estimated population of the State that 
                                is residing in nonurbanized areas (as 
                                determined under subclause (II)) 
                                expressed as a percentage of the total 
                                nonurbanized population of all States.
                                    ``(II) Nonurbanized population.--
                                For purposes of subclause (I), the 
                                estimated population of the State that 
                                is residing in nonurbanized areas shall 
                                be one minus the urbanized population 
                                of the State (as determined using the 
                                most recent decennial census), 
                                expressed as a percentage of the total 
                                population of the State (as determined 
                                using the most recent decennial 
                                census), multiplied by the current 
                                estimated population of the State.
                            ``(iv) Poverty percentage.--For purposes of 
                        clause (ii)(I), the poverty percentage of the 
                        State shall be the estimated number of people 
                        residing in the State with incomes below 200 
                        percent of the income official poverty line (as 
                        determined by the Office of Management and 
                        Budget) expressed as a percentage of the total 
                        number of such people residing in all States.
                            ``(v) Multiple grant percentage.--For 
                        purposes of clause (ii)(I), the multiple grant 
                        percentage of the State shall be the amount of 
                        Federal funding received by the State under 
                        grants awarded under sections 329, 330, and 
                        340, expressed as a percentage of the total 
                        amounts received under such grants by all 
                        States. With respect to a State, such 
                        percentage shall not exceed twice the general 
                        population percentage of the State under clause 
                        (vi) or be less than one-half of the States 
                        general population percentage.
                            ``(vi) General population percentage.--For 
                        purposes of clause (ii)(II), the general 
                        population percentage of the State shall be the 
                        total population of the State (as determined by 
                        the Secretary of Commerce) expressed as a 
                        percentage of the total population of all 
                        States.
                    ``(C) Federal matching percentage.--
                            ``(i) In general.--For purposes of 
                        subparagraph (A), the Federal matching 
                        percentage of the State shall be equal to one, 
                        less the State matching percentage (as 
                        determined under clause (ii)).
                            ``(ii) State matching percentage.--For 
                        purposes of clause (i), the State matching 
                        percentage of the State shall be 0.25 
                        multiplied by the ratio of the total taxable 
                        resource percentage (as determined under clause 
                        (iii)) to the need-adjusted population of the 
                        State (as determined under subparagraph (B)).
                            ``(iii) Total taxable resource 
                        percentage.--For purposes of clause (ii), the 
                        total taxable resources percentage of the State 
                        shall be the total taxable resources of a State 
                        (as determined by the Secretary of the 
                        Treasury) expressed as a percentage of the sum 
                        of the total taxable resources of all States.
            ``(3) Annual estimates.--
                    ``(A) In general.--If the Secretary of Commerce 
                does not produce the annual estimates required under 
                paragraph (2)(B)(iv), such estimates shall be 
                determined by multiplying the percentage of the 
                population of the State that is below 200 percent of 
                the income official poverty line as determined using 
                the most recent decennial census by the most recent 
                estimate of the total population of the State. Except 
                as provided in subparagraph (B), the calculations 
                required under this subparagraph shall be made based on 
                the most recent 3-year average of the total taxable 
                resources of individuals within the State.
                    ``(B) District of columbia.--Notwithstanding 
                subparagraph (A), the calculations required under such 
                subparagraph with respect to the District of Columbia 
                shall be based on the most recent 3-year average of the 
                personal income of individuals residing within the 
                District as a percentage of the personal income for all 
                individuals residing within the District, as determined 
                by the Secretary of Commerce.
            ``(4) Matching requirement.--A State that receives an 
        allotment under this section shall make available State 
        resources (either directly or indirectly) to carry out this 
        section in an amount that shall equal the State matching 
        percentage for the State (as determined under paragraph 
        (2)(C)(ii)) divided by the Federal matching percentage (as 
        determined under paragraph (2)(C)).
    ``(c) Application.--
            ``(1) In general.--To be eligible to receive an allotment 
        under this section, a State shall prepare and submit an 
        application to the Secretary at such time, in such manner, and 
        containing such information as the Secretary may by regulation 
        require.
            ``(2) Assurances.--A State application submitted under 
        paragraph (1) shall contain an assurance that--
                    ``(A) the State will use amounts received under its 
                allotment consistent with the requirements of this 
                section; and
                    ``(B) the State will provide, from non-Federal 
                sources, the amounts required under subsection (b)(4).
    ``(d) Use of Funds.--
            ``(1) In general.--The State shall use amounts received 
        under this section to award grants to eligible public and 
        nonprofit private entities, or consortia of such entities, 
        within the State to enable such entities or consortia to 
        provide services of the type described in paragraph (2) of 
        section 329(h) to low-income or medically underserved 
        populations.
            ``(2) Eligibility.--To be eligible to receive a grant under 
        paragraph (1), an entity or consortium shall--
                    ``(A) prepare and submit to the administering 
                entity of the State, an application at such time, in 
                such manner, and containing such information as such 
                administering entity may require, including a plan for 
                the provision of services of the type described in 
                paragraph (3);
                    ``(B) provide assurances that services will be 
                provided under the grant at fee rates established or 
                determined in accordance with section 330(e)(3)(F); and
                    ``(C) provide assurances that in the case of 
                services provided to individuals with health insurance, 
                such insurance shall be used as the primary source of 
                payment for such services.
            ``(3) Services.--The services to be provided under a grant 
        awarded under paragraph (1) shall include--
                    ``(A) one or more of the types of primary health 
                services described in section 330(b)(1);
                    ``(B) one or more of the types of supplemental 
                health services described in section 330(b)(2); and
                    ``(C) any other services determined appropriate by 
                the administering entity of the State.
            ``(4) Target populations.--Entities or consortia receiving 
        grants under paragraph (1) shall, in providing the services 
        described in paragraph (3), substantially target populations of 
        low-income or medically underserved populations within the 
        State who reside in medically underserved or health 
        professional shortage areas, areas certified as underserved 
        under the rural health clinic program, or other areas 
        determined appropriate by the administering entity of the 
        State, within the State.
            ``(5) Priority.--In awarding grants under paragraph (1), 
        the State shall--
                    ``(A) give priority to entities or consortia that 
                can demonstrate through the plan submitted under 
                paragraph (2) that--
                            ``(i) the services provided under the grant 
                        will expand the availability of primary care 
                        services to the maximum number of low-income or 
                        medically underserved populations who have no 
                        access to such care on the date of the grant 
                        award; and
                            ``(ii) the delivery of services under the 
                        grant will be cost-effective; and
                    ``(B) ensure that an equitable distribution of 
                funds is achieved among urban and rural entities or 
                consortia.
    ``(e) Reports and Audits.--Each State shall prepare and submit to 
the Secretary annual reports concerning the State's activities under 
this section which shall be in such form and contain such information 
as the Secretary determines appropriate. Each such State shall 
establish fiscal control and fund accounting procedures as may be 
necessary to assure that amounts received under this section are being 
disbursed properly and are accounted for, and include the results of 
audits conducted under such procedures in the reports submitted under 
this subsection.
    ``(f) Payments.--
            ``(1) Entitlement.--Each State for which an application has 
        been approved by the Secretary under this section shall be 
        entitled to payments under this section for each fiscal year in 
        an amount not to exceed the State's allotment under subsection 
        (b) to be expended by the State in accordance with the terms of 
        the application for the fiscal year for which the allotment is 
        to be made.
            ``(2) Method of payments.--The Secretary may make payments 
        to a State in installments, and in advance or by way of 
        reimbursement, with necessary adjustments on account of 
        overpayments or underpayments, as the Secretary may determine.
            ``(3) State spending of payments.--Payments to a State from 
        the allotment under subsection (b) for any fiscal year must be 
        expended by the State in that fiscal year or in the succeeding 
        fiscal year.
    ``(g) Definition.--As used in this section, the term `administering 
entity of the State' means the agency or official designated by the 
chief executive officer of the State to administer the amounts provided 
to the State under this section.
    ``(h) Funding.--Notwithstanding any other provision of law, the 
Secretary shall use 50 percent of the amounts that the Secretary is 
required to utilize under section 330B(h) in each fiscal year to carry 
out this section.''.

SEC. 202. PROGRAM TO PROVIDE FOR EXPANSION OF FEDERALLY QUALIFIED 
              HEALTH CENTERS.

    (a) In General.--Subpart I of part D of title III of the Public 
Health Service Act (42 U.S.C. 254b et seq.) (as amended by section 201) 
is further amended by adding at the end thereof the following new 
section:

``SEC. 330B. PROGRAM TO PROVIDE FOR EXPANSION OF FEDERALLY QUALIFIED 
              HEALTH CENTERS.

    ``(a) Establishment of Health Services Access Program.--From 
amounts appropriated under this section, the Secretary shall, acting 
through the Bureau of Health Care Delivery Assistance, award grants 
under this section to federally qualified health centers (hereafter 
referred to in this section as `FQHCs') and other entities and 
organizations submitting applications under this section (as described 
in subsection (c)) for the purpose of providing access to services for 
medically underserved populations (as defined in section 330(b)(3)) or 
in high impact areas (as defined in section 329(a)(5)) not currently 
being served by a FQHC.
    ``(b) Eligibility for Grants.--
            ``(1) In general.--The Secretary shall award grants under 
        this section to entities or organizations described in this 
        paragraph and paragraph (2) which have submitted a proposal to 
        the Secretary to expand such entities or organizations 
        operations (including expansions to new sites (as determined 
        necessary by the Secretary)) to serve medically underserved 
        populations or high impact areas not currently served by a FQHC 
        and which--
                    ``(A) have as of the date of enactment of this 
                section, been certified by the Secretary as a FQHC 
                under section 1905(l)(2)(B) of the Social Security Act;
                    ``(B) have submitted applications to the Secretary 
                to qualify as FQHCs under section 1905(l)(2)(B) of the 
                Social Security Act; or
                    ``(C) have submitted a plan to the Secretary which 
                provides that the entity or organization will meet the 
                requirements to qualify as a FQHC when operational.
            ``(2) Non-fqhc entities.--
                    ``(A) Eligibility.--The Secretary shall also make 
                grants under this section to any public or private 
                nonprofit agency, or any health care entity or 
                organization which--
                            ``(i) meets the requirements necessary to 
                        qualify as a FQHC, except the requirement that 
                        such agency, entity, or organization has a 
                        consumer majority governing board,
                            ``(ii) has submitted a proposal to the 
                        Secretary to provide those services provided by 
                        a FQHC as defined in section 1905(l)(2)(B) of 
                        the Social Security Act, and
                            ``(iii) is designed to promote access to 
                        primary care services or to reduce reliance on 
                        hospital emergency rooms or other high cost 
                        providers of primary health care services,
                Provided, That the proposal described in clause (ii) is 
                developed by the agency, entity, or organization (or 
                such agencies, entities, or organizations acting in a 
                consortium in a community) with the review and approval 
                of the Governor of the State in which such agency, 
                entity, or organization is located.
                    ``(B) Limitation.--The Secretary shall provide in 
                making grants to entities or organizations described in 
                this paragraph that not more than 10 percent of the 
                funds provided for grants under this section shall be 
                made available for grants to such entities or 
                organizations.
    ``(c) Application Requirements.--
            ``(1) In general.--In order to be eligible to receive a 
        grant under this section, a FQHC or other entity or 
        organization must submit an application in such form and at 
        such time as the Secretary shall prescribe and which meets the 
        requirements of this subsection.
            ``(2) Requirements.--An application submitted under this 
        section must provide--
                    ``(A)(i) for a schedule of fees or payments for the 
                provision of the services provided by the entity or 
                organization designed to cover its reasonable costs of 
                operations; and
                    ``(ii) for a corresponding schedule of discounts to 
                be applied to such fees or payments, based upon the 
                patient's ability to pay (determined by using a sliding 
                scale formula based on the income of the patient);
                    ``(B) assurances that the entity or organization 
                provides services to persons who are eligible for 
                benefits under title XVIII of the Social Security Act, 
                for medical assistance under title XIX of such Act, or 
                for assistance for medical expenses under any other 
                public assistance program or private health insurance 
                program; and
                    ``(C) assurances that the entity or organization 
                has made and will continue to make every reasonable 
                effort to collect reimbursement for services--
                            ``(i) from persons eligible for assistance 
                        under any of the programs described in 
                        subparagraph (B); and
                            ``(ii) from patients not entitled to 
                        benefits under any such programs.
    ``(d) Limitations on Use of Funds.--
            ``(1) In general.--From the amounts awarded to a FQHC or 
        other entity or organization under this section, funds may be 
        used for purposes of planning but may only be expended for the 
        costs of--
                    ``(A) assessing the needs of the populations or 
                proposed areas to be served;
                    ``(B) preparing a description of how the needs 
                identified will be met; and
                    ``(C) development of an implementation plan that 
                addresses--
                            ``(i) recruitment and training of 
                        personnel; and
                            ``(ii) activities necessary to achieve 
                        operational status in order to meet FQHC 
                        requirements under 1905(l)(2)(B) of the Social 
                        Security Act.
            ``(2) Recruiting, training, and compensation of staff.--
        From the amounts awarded to an entity or organization under 
        this section, funds may be used for the purposes of paying for 
        the costs of recruiting, training, and compensating staff 
        (clinical and associated administrative personnel (to the 
        extent such costs are not already reimbursed under title XIX of 
        the Social Security Act or any other State or Federal program)) 
        to the extent necessary to allow the entity or organization to 
        operate at new or expanded existing sites.
            ``(3) Facilities and equipment.--From the amounts awarded 
        to an entity or organization under this section, funds may be 
        expended for the purposes of acquiring facilities and equipment 
        but only for the costs of--
                    ``(A) construction of new buildings (to the extent 
                that new construction is found to be the most cost-
                efficient approach by the Secretary);
                    ``(B) acquiring, expanding, or modernizing existing 
                facilities;
                    ``(C) purchasing essential (as determined by the 
                Secretary) equipment; and
                    ``(D) amortization of principal and payment of 
                interest on loans obtained for purposes of site 
                construction, acquisition, modernization, or expansion, 
                as well as necessary equipment.
            ``(4) Services.--From the amounts awarded to an entity or 
        organization under this section, funds may be expended for the 
        payment of services but only for the costs of--
                    ``(A) providing or arranging for the provision of 
                all services through the entity or organization 
                necessary to qualify such entity or organization as a 
                FQHC under section 1905(l)(2)(B) of the Social Security 
                Act;
                    ``(B) providing or arranging for any other service 
                that a FQHC may provide and be reimbursed for under 
                title XIX of the Social Security Act; and
                    ``(C) providing any unreimbursed costs of providing 
                services as described in section 330(a) to patients.
    ``(e) Priorities in the Awarding of Grants.--
            ``(1) Certified fqhcs.--The Secretary shall give priority 
        in awarding grants under this section to entities and 
        organizations which have, as of the date of enactment of this 
        section, been certified as a FQHC under section 1905(l)(2)(B) 
        of the Social Security Act and which have submitted a proposal 
        to the Secretary to expand their operations (including 
        expansion to new sites) to serve medically underserved 
        populations for high impact areas not currently served by a 
        FQHC. The Secretary shall give first priority in awarding 
        grants under this section to those FQHCs or other entities or 
        organizations which propose to serve populations with the 
        highest degree of unmet need, and which can demonstrate the 
        ability to expand their operations in the most efficient 
        manner.
            ``(2) Qualified fqhcs.--The Secretary shall give second 
        priority in awarding grants to entities and organizations which 
        have submitted applications to the Secretary which demonstrate 
        that the entities or organizations will qualify as FQHCs under 
        section 1905(l)(2)(B) of the Social Security Act before they 
        provide or arrange for the provision of services supported by 
        funds awarded under this section, and which are serving or 
        proposing to serve medically underserved populations or high 
        impact areas which are not currently served (or proposed to be 
        served) by a FQHC.
            ``(3) Expanded services and projects.--The Secretary shall 
        give third priority in awarding grants in subsequent years to 
        those FQHCs or other entities or organizations which have 
        provided for expanded services and projects and are able to 
        demonstrate that such entities or organizations will incur 
        significant unreimbursed costs in providing such expanded 
        services.
    ``(f) Return of Funds to Secretary for Costs Reimbursed From Other 
Sources.--To the extent that a FQHC or other entity or organization 
receiving funds under this section is reimbursed from another source 
for the provision of services to an individual, and does not use such 
increased reimbursement to expand services furnished, to expand areas 
served, to compensate for costs of unreimbursed services provided to 
patients, or to promote recruitment, training, or retention of 
personnel, such excess revenues shall be returned to the Secretary.
    ``(g) Termination of Grants.--
            ``(1) Failure to meet fqhc requirements.--
                    ``(A) In general.--With respect to any entity or 
                organization that is receiving funds awarded under this 
                section and which subsequently fails to meet the 
                requirements to qualify as a FQHC under section 
                1905(l)(2)(B) of the Social Security Act or is an 
                entity or organization that is not required to meet the 
                requirements to qualify as a FQHC under section 
                1905(l)(2)(B) of the Social Security Act but fails to 
                meet the requirements of this section, the Secretary 
                shall terminate the award of funds under this section 
                to such entity or organization.
                    ``(B) Notice.--Prior to any termination of funds 
                under this section to an entity or organization, the 
                entity or organization shall be entitled to 60 days' 
                prior notice of termination and, as provided by the 
                Secretary in regulations, an opportunity to correct any 
                deficiencies in order to allow the entity or 
                organization to continue to receive funds under this 
                section.
            ``(2) Requirements.--Upon any termination of funding under 
        this section, the Secretary may (to the extent practicable)--
                    ``(A) sell any property (including equipment) 
                acquired or constructed by the entity or organization 
                using funds made available under this section or 
                transfer such property to another FQHC, except that the 
                Secretary shall reimburse any costs which were incurred 
                by the entity or organization in acquiring or 
                constructing such property (including equipment) which 
                were not supported by grants under this section; and
                    ``(B) recoup any funds provided to an entity or 
                organization terminated under this section.
    ``(h) Authorization of Appropriations.--There are authorized to be 
appropriated to carry out this section $600,000,000 for each of the 
fiscal years 1994 through 1998.''.
    (b) Effective Date.--The amendments made by subsection (a) shall 
become effective with respect to services furnished by a federally 
qualified health center or other qualifying entity or organization 
described in this section beginning on or after the date of enactment 
of this Act.

 TITLE III--EXPANDING THE SUPPLY OF HEALTH PROFESSIONALS IN RURAL AREAS

SEC. 301. EXPANSION OF NATIONAL HEALTH SERVICE CORPS.

    Section 338H(b) of the Public Health Service Act (42 U.S.C. 
254q(b)) is amended--
            (1) in paragraph (1), by striking ``and such sums'' and all 
        that follows through the end thereof and inserting 
        ``$120,000,000 for each of the fiscal years 1993 through 
        2000.''; and
            (2) in paragraph (2)--
                    (A) by redesignating subparagraphs (A) and (B) as 
                subparagraphs (B) and (C), respectively; and
                    (B) by inserting before subparagraph (B) (as so 
                redesignated) the following new subparagraph:
                    ``(A) In general.--Of the amount appropriated under 
                paragraph (1) for each fiscal year, the Secretary shall 
                utilize 25 percent of such amount to carry out section 
                338A and 75 percent of such amount to carry out section 
                338B.''.

SEC. 302. TAX INCENTIVES FOR PRACTICE IN RURAL AREAS.

    (a) Nonrefundable Credit for Certain Primary Health Services 
Providers.--
            (1) In general.--Subpart A of part IV of subchapter A of 
        chapter 1 of the Internal Revenue Code of 1986 (relating to 
        nonrefundable personal credits) is amended by inserting after 
        section 25 the following new section:

``SEC. 25A. PRIMARY HEALTH SERVICES PROVIDERS.

    ``(a) Allowance of Credit.--In the case of a qualified primary 
health services provider, there is allowed as a credit against the tax 
imposed by this chapter for any taxable year in a mandatory service 
period an amount equal to the product of--
            ``(1) the lesser of--
                    ``(A) the number of months of such period occurring 
                in such taxable year, or
                    ``(B) 36 months, reduced by the number of months 
                taken into account under this paragraph with respect to 
                such provider for all preceding taxable years (whether 
                or not in the same mandatory service period), 
                multiplied by
            ``(2) $1,000 ($500 in the case of a qualified primary 
        health services provider who is a physician assistant or a 
        nurse practitioner).
    ``(b) Qualified Primary Health Services Provider.--For purposes of 
this section, the term `qualified primary health services provider' 
means any physician, physician assistant, or nurse practitioner who for 
any month during a mandatory service period is certified by the Bureau 
to be a primary health services provider who--
            ``(1) is providing primary health services--
                    ``(A) full time, and
                    ``(B) to individuals at least 80 percent of whom 
                reside in a rural health professional shortage area,
            ``(2) is not receiving during such year a scholarship under 
        the National Health Service Corps Scholarship Program or a loan 
        repayment under the National Health Service Corps Loan 
        Repayment Program,
            ``(3) is not fulfilling service obligations under such 
        Programs, and
            ``(4) has not defaulted on such obligations.
    ``(c) Mandatory Service Period.--For purposes of this section, the 
term `mandatory service period' means the period of 60 consecutive 
calendar months beginning with the first month the taxpayer is a 
qualified primary health services provider.
    ``(d) Definitions and Special Rules.--For purposes of this 
section--
            ``(1) Bureau.--The term `Bureau' means the Bureau of Health 
        Care Delivery and Assistance, Health Resources and Services 
        Administration of the United States Public Health Service.
            ``(2) Physician.--The term `physician' has the meaning 
        given to such term by section 1861(r) of the Social Security 
        Act.
            ``(3) Physician assistant; nurse practitioner.--The terms 
        `physician assistant' and `nurse practitioner' have the 
        meanings given to such terms by section 1861(aa)(3) of the 
        Social Security Act.
            ``(4) Primary health services provider.--The term `primary 
        health services provider' means a provider of primary health 
        services (as defined in section 330(b)(1) of the Public Health 
        Service Act).
            ``(5) Rural health professional shortage area.--The term 
        `rural health professional shortage area' means--
                    ``(A) a rural health professional shortage area (as 
                defined in section 332(a)(1)(A) of the Public Health 
                Service Act) in a rural area (as determined under 
                section 1886(d)(2)(D) of the Social Security Act), or
                    ``(B) an area which is determined by the Secretary 
                of Health and Human Services as equivalent to an area 
                described in subparagraph (A) and which is designated 
                by the Bureau of the Census as not urbanized.
                    ``(C) a community that is certified as underserved 
                by the Secretary for purposes of participation in the 
                rural health clinic program under title XVIII of the 
                Social Security Act.
    ``(e) Recapture of Credit.--
            ``(1) In general.--If, during any taxable year, there is a 
        recapture event, then the tax of the taxpayer under this 
        chapter for such taxable year shall be increased by an amount 
        equal to the product of--
                    ``(A) the applicable percentage, and
                    ``(B) the aggregate unrecaptured credits allowed to 
                such taxpayer under this section for all prior taxable 
                years.
            ``(2) Applicable recapture percentage.--
                    ``(A) In general.--For purposes of this subsection, 
                the applicable recapture percentage shall be determined 
                from the following table:

                    ``If the recapture
                                                  The applicable recap-
                      event occurs during:
                                                    ture percentage is:
                            Months 1-24..............         100      
                            Months 25-36.............          75      
                            Months 37-48.............          50      
                            Months 49-60.............          25      
                            Months 61 and thereafter.          0.      
                    ``(B) Timing.--For purposes of subparagraph (A), 
                month 1 shall begin on the first day of the mandatory 
                service period.
            ``(3) Recapture event defined.--
                    ``(A) In general.--For purposes of this subsection, 
                the term `recapture event' means the failure of the 
                taxpayer to be a qualified primary health services 
                provider for any month during any mandatory service 
                period.
                    ``(B) Cessation of designation.--The cessation of 
                the designation of any area as a rural health 
                professional shortage area after the beginning of the 
                mandatory service period for any taxpayer shall not 
                constitute a recapture event.
                    ``(C) Secretarial waiver.--The Secretary may waive 
                any recapture event caused by extraordinary 
                circumstances.
            ``(4) No credits against tax.--Any increase in tax under 
        this subsection shall not be treated as a tax imposed by this 
        chapter for purposes of determining the amount of any credit 
        under subpart A, B, or D of this part.''.
            (2) Clerical amendment.--The table of sections for subpart 
        A of part IV of subchapter A of chapter 1 of such Code is 
        amended by inserting after the item relating to section 25 the 
        following new item:

                              ``Sec. 25A. Primary health services 
                                        providers.''.
            (3) Effective date.--The amendments made by this subsection 
        shall apply to taxable years beginning after the date of the 
        enactment of this Act.
    (b) National Health Service Corps Loan Repayments Excluded From 
Gross Income.--
            (1) In general.--Part III of subchapter B of chapter 1 of 
        the Internal Revenue Code of 1986 (relating to items 
        specifically excluded from gross income) is amended by 
        redesignating section 136 as section 137 and by inserting after 
        section 135 the following new section:

``SEC. 136. NATIONAL HEALTH SERVICE CORPS LOAN REPAYMENTS.

    ``(a) General Rule.--Gross income shall not include any qualified 
loan repayment.
    ``(b) Qualified Loan Repayment.--For purposes of this section, the 
term `qualified loan repayment' means any payment made on behalf of the 
taxpayer by the National Health Service Corps Loan Repayment Program 
under section 338B(g) of the Public Health Service Act.''.
            (2) Conforming amendment.--Paragraph (3) of section 338B(g) 
        of the Public Health Service Act is amended by striking 
        ``Federal, State, or local'' and inserting ``State or local''.
            (3) Clerical amendment.--The table of sections for part III 
        of subchapter B of chapter 1 of the Internal Revenue Code of 
        1986 is amended by striking the item relating to section 136 
        and inserting the following:

                              ``Sec. 136. National Health Service Corps 
                                        loan repayments.
                              ``Sec. 137. Cross references to other 
                                        Acts.''.
            (4) Effective date.--The amendments made by this subsection 
        shall apply to payments made under section 338B(g) of the 
        Public Health Service Act after the date of the enactment of 
        this Act.
    (c) Expensing of Medical Equipment.--
            (1) In general.--Section 179 of the Internal Revenue Code 
        of 1986 (relating to election to expense certain depreciable 
        business assets) is amended--
                    (A) by striking paragraph (1) of subsection (b) and 
                inserting the following:
            ``(1) Dollar limitation.--
                    ``(A) General rule.--The aggregate cost which may 
                be taken into account under subsection (a) for any 
                taxable year shall not exceed $10,000.
                    ``(B) Rural health care property.--In the case of 
                rural health care property, the aggregate cost which 
                may be taken into account under subsection (a) for any 
                taxable year shall not exceed $25,000, reduced by the 
                amount otherwise taken into account under subsection 
                (a) for such year.''; and
                    (B) by adding at the end of subsection (d) the 
                following new paragraph:
            ``(11) Rural health care property.--For purposes of this 
        section, the term `rural health care property' means section 
        179 property used by a physician (as defined in section 1861(r) 
        of the Social Security Act) in the active conduct of such 
        physician's full-time trade or business of providing primary 
        health services (as defined in section 330(b)(1) of the Public 
        Health Service Act) in a rural health professional shortage 
        area (as defined in section 25A(d)(5)).''.
            (2) Effective date.--The amendments made by this subsection 
        shall apply to property placed in service in taxable years 
        beginning after the date of enactment of this Act.
    (d) Deduction for Student Loan Payments by Medical Professionals 
Practicing in Rural Areas.--
            (1) Interest on student loans not treated as personal 
        interest.--Section 163(h)(2) of the Internal Revenue Code of 
        1986 (defining personal interest) is amended by striking 
        ``and'' at the end of subparagraph (D), by striking the period 
        at the end of subparagraph (E) and inserting ``, and'', and by 
        adding at the end thereof the following new subparagraph:
            ``(F) any qualified medical education interest (within the 
        meaning of subsection (k)).''.
            (2) Qualified medical education interest defined.--Section 
        163 of such Code (relating to interest expenses) is amended by 
        redesignating subsection (k) as subsection (l) and by inserting 
        after subsection (j) the following new subsection:
    ``(k) Qualified Medical Education Interest of Medical Professionals 
Practicing in Rural Areas.--
            ``(1) In general.--For purposes of subsection (h)(2)(F), 
        the term `qualified medical education interest' means an amount 
        which bears the same ratio to the interest paid on qualified 
        educational loans during the taxable year by an individual 
        performing services under a qualified rural medical practice 
        agreement as--
                    ``(A) the number of months during the taxable year 
                during which such services were performed, bears to
                    ``(B) the number of months in the taxable year.
            ``(2) Dollar limitation.--The aggregate amount which may be 
        treated as qualified medical education interest for any taxable 
        year with respect to any individual shall not exceed $5,000.
            ``(3) Qualified rural medical practice agreement.--For 
        purposes of this subsection--
                    ``(A) In general.--The term `qualified rural 
                medical practice agreement' means a written agreement 
                between an individual and an applicable rural community 
                under which the individual agrees--
                            ``(i) in the case of a medical doctor, upon 
                        completion of the individual's residency (or 
                        internship if no residency is required), or
                            ``(ii) in the case of a registered nurse, 
                        nurse practitioner, or physician's assistant, 
                        upon completion of the education to which the 
                        qualified education loan relates,
                to perform full-time services as such a medical 
                professional in the applicable rural community for a 
                period of 24 consecutive months. An individual and an 
                applicable rural community may elect to have the 
                agreement apply for 36 consecutive months rather than 
                24 months.
                    ``(B) Special rule for computing periods.--An 
                individual shall be treated as meeting the 24 or 36 
                consecutive month requirement under subparagraph (A) 
                if, during each 12-consecutive month period within 
                either such period, the individual performs full-time 
                services as a medical doctor, registered nurse, nurse 
                practitioner, or physician's assistant, whichever 
                applies, in the applicable rural community during 9 of 
                the months in such 12-consecutive month period. For 
                purposes of this subsection, an individual meeting the 
                requirements of the preceding sentence shall be treated 
                as performing services during the entire 12-month 
                period.
                    ``(C) Applicable rural community.--The term 
                `applicable rural community' means--
                            ``(i) any political subdivision of a State 
                        which--
                                    ``(I) has a population of 5,000 or 
                                less, and
                                    ``(II) has a per capita income of 
                                $15,000 or less, or
                            ``(ii) an Indian reservation which has a 
                        per capita income of $15,000 or less.
            ``(4) Qualified educational loan.--The term `qualified 
        educational loan' means any indebtedness to pay qualified 
        tuition and related expenses (within the meaning of section 
        117(b)) and reasonable living expenses--
                    ``(A) which are paid or incurred--
                            ``(i) as a candidate for a degree as a 
                        medical doctor at an educational institution 
                        described in section 170(b)(1)(A)(ii), or
                            ``(ii) in connection with courses of 
                        instruction at such an institution necessary 
                        for certification as a registered nurse, nurse 
                        practitioner, or physician's assistant, and
                    ``(B) which are paid or incurred within a 
                reasonable time before or after such indebtedness is 
                incurred.
            ``(5) Recapture.--If an individual fails to carry out a 
        qualified rural medical practice agreement during any taxable 
        year, then--
                    ``(A) no deduction with respect to such agreement 
                shall be allowable by reason of subsection (h)(2)(F) 
                for such taxable year and any subsequent taxable year, 
                and
                    ``(B) there shall be included in gross income for 
                such taxable year the aggregate amount of the 
                deductions allowable under this section (by reason of 
                subsection (h)(2)(F)) for all preceding taxable years.
            ``(6) Definitions.--For purposes of this subsection, the 
        terms `registered nurse', `nurse practitioner', and 
        `physician's assistant' have the meaning given such terms by 
        section 1861 of the Social Security Act.''.
            (3) Deduction allowed in computing adjusted gross income.--
        Section 62(a) of such Code is amended by inserting after 
        paragraph (13) the following new paragraph:
            ``(14) Interest on student loans of rural health 
        professionals.--The deduction allowable by reason of section 
        163(h)(2)(F) (relating to student loan payments of medical 
        professionals practicing in rural areas).''.
            (4) Effective date.--The amendments made by this subsection 
        shall apply to taxable years beginning after the date of the 
        enactment of this Act.applies, in the applicable rural 
        community during 9 of the months in such 12-consecutive month 
        period. For purposes of this subsection, an individual meeting 
        the requirements of the preceding sentence shall be treated as 
        performing services during the entire 12-month period.
                    ``(C) Applicable rural community.--The term 
                `applicable rural community' means--
                            ``(i) any political subdivision of a State 
                        which--
                                    ``(I) has a population of 5,000 or 
                                less, and
                                    ``(II) has a per capita income of 
                                $15,000 or less, or
                            ``(ii) an Indian reservation which has a 
                        per capita income of $15,000 or less.
            ``(4) Qualified educational loan.--The term `qualified 
        educational loan' means any indebtedness to pay qualified 
        tuition and related expenses (within the meaning of section 
        117(b)) and reasonable living expenses--
                    ``(A) which are paid or incurred--
                            ``(i) as a candidate for a degree as a 
                        medical doctor at an educational institution 
                        described in section 170(b)(1)(A)(ii), or
                            ``(ii) in connection with courses of 
                        instruction at such an institution necessary 
                        for certification as a registered nurse, nurse 
                        practitioner, or physician's assistant, and
                    ``(B) which are paid or incurred within a 
                reasonable time before or after such indebtedness is 
                incurred.
            ``(5) Recapture.--If an individual fails to carry out a 
        qualified rural medical practice agreement during any taxable 
        year, then--
                    ``(A) no deduction with respect to such agreement 
                shall be allowable by reason of subsection (h)(2)(F) 
                for such taxable year and any subsequent taxable year, 
                and
                    ``(B) there shall be included in gross income for 
                such taxable year the aggregate amount of the 
                deductions allowable under this section (by reason of 
                subsection (h)(2)(F)) for all preceding taxable years.
            ``(6) Definitions.--For purposes of this subsection, the 
        terms `registered nurse', `nurse practitioner', and 
        `physician's assistant' have the meaning given such terms by 
        section 1861 of the Social Security Act.''.
            (3) Deduction allowed in computing adjusted gross income.--
        Section 62(a) of such Code is amended by inserting after 
        paragraph (13) the following new paragraph:
            ``(14) Interest on student loans of rural health 
        professionals.--The deduction allowable by reason of section 
        163(h)(2)(F) (relating to student loan payments of medical 
        professionals practicing in rural areas).''.
            (4) Effective date.--The amendments made by this subsection 
        shall apply to taxable years beginning after the date of the 
        enactment of this Act.

                   TITLE IV--MISCELLANEOUS PROVISIONS

SEC. 401. EFFECTIVE DATE.

    Unless specifically provided otherwise, this Act and the amendments 
made by this Act shall become effective on the date of enactment of 
this Act.

                                 <all>

S 1215 IS----2
S 1215 IS----3
S 1215 IS----4
S 1215 IS----5