[Congressional Bills 104th Congress]
[From the U.S. Government Publishing Office]
[S. 1044 Enrolled Bill (ENR)]

        S.1044

                       One Hundred Fourth Congress

                                 of the

                        United States of America


                          AT THE SECOND SESSION

         Begun and held at the City of Washington on Wednesday,
   the third day of January, one thousand nine hundred and ninety-six


                                 An Act


 
 To amend title III of the Public Health Service Act to consolidate and 
    reauthorize provisions relating to health centers, and for other 
                                purposes.

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

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Health Centers Consolidation Act of 
1996''.

SEC. 2. CONSOLIDATION AND REAUTHORIZATION OF PROVISIONS.

    Subpart I of part D of title III of the Public Health Service Act 
(42 U.S.C. 254b et seq.) is amended to read as follows:

                      ``Subpart I--Health Centers

``SEC. 330. HEALTH CENTERS.

    ``(a) Definition of Health Center.--
        ``(1) In general.--For purposes of this section, the term 
    `health center' means an entity that serves a population that is 
    medically underserved, or a special medically underserved 
    population comprised of migratory and seasonal agricultural 
    workers, the homeless, and residents of public housing, by 
    providing, either through the staff and supporting resources of the 
    center or through contracts or cooperative arrangements--
            ``(A) required primary health services (as defined in 
        subsection (b)(1)); and
            ``(B) as may be appropriate for particular centers, 
        additional health services (as defined in subsection (b)(2)) 
        necessary for the adequate support of the primary health 
        services required under subparagraph (A);
    for all residents of the area served by the center (hereafter 
    referred to in this section as the `catchment area').
        ``(2) Limitation.--The requirement in paragraph (1) to provide 
    services for all residents within a catchment area shall not apply 
    in the case of a health center receiving a grant only under 
    subsection (g), (h), or (i).
    ``(b) Definitions.--For purposes of this section:
        ``(1) Required primary health services.--
            ``(A) In general.--The term `required primary health 
        services' means--
                ``(i) basic health services which, for purposes of this 
            section, shall consist of--

                    ``(I) health services related to family medicine, 
                internal medicine, pediatrics, obstetrics, or 
                gynecology that are furnished by physicians and where 
                appropriate, physician assistants, nurse practitioners, 
                and nurse midwives;
                    ``(II) diagnostic laboratory and radiologic 
                services;
                    ``(III) preventive health services, including--

                        ``(aa) prenatal and perinatal services;
                        ``(bb) screening for breast and cervical 
                    cancer;
                        ``(cc) well-child services;
                        ``(dd) immunizations against vaccine-
                    preventable diseases;
                        ``(ee) screenings for elevated blood lead 
                    levels, communicable diseases, and cholesterol;
                        ``(ff) pediatric eye, ear, and dental 
                    screenings to determine the need for vision and 
                    hearing correction and dental care;
                        ``(gg) voluntary family planning services; and
                        ``(hh) preventive dental services;

                    ``(IV) emergency medical services; and
                    ``(V) pharmaceutical services as may be appropriate 
                for particular centers;

                ``(ii) referrals to providers of medical services and 
            other health-related services (including substance abuse 
            and mental health services);
                ``(iii) patient case management services (including 
            counseling, referral, and follow-up services) and other 
            services designed to assist health center patients in 
            establishing eligibility for and gaining access to Federal, 
            State, and local programs that provide or financially 
            support the provision of medical, social, educational, or 
            other related services;
                ``(iv) services that enable individuals to use the 
            services of the health center (including outreach and 
            transportation services and, if a substantial number of the 
            individuals in the population served by a center are of 
            limited English-speaking ability, the services of 
            appropriate personnel fluent in the language spoken by a 
            predominant number of such individuals); and
                ``(v) education of patients and the general population 
            served by the health center regarding the availability and 
            proper use of health services.
            ``(B) Exception.--With respect to a health center that 
        receives a grant only under subsection (g), the Secretary, upon 
        a showing of good cause, shall--
                ``(i) waive the requirement that the center provide all 
            required primary health services under this paragraph; and
                ``(ii) approve, as appropriate, the provision of 
            certain required primary health services only during 
            certain periods of the year.
        ``(2) Additional health services.--The term `additional health 
    services' means services that are not included as required primary 
    health services and that are appropriate to meet the health needs 
    of the population served by the health center involved. Such term 
    may include--
            ``(A) environmental health services, including--
                ``(i) the detection and alleviation of unhealthful 
            conditions associated with water supply;
                ``(ii) sewage treatment;
                ``(iii) solid waste disposal;
                ``(iv) rodent and parasitic infestation;
                ``(v) field sanitation;
                ``(vi) housing; and
                ``(vii) other environmental factors related to health; 
            and
            ``(B) in the case of health centers receiving grants under 
        subsection (g), special occupation-related health services for 
        migratory and seasonal agricultural workers, including--
                ``(i) screening for and control of infectious diseases, 
            including parasitic diseases; and
                ``(ii) injury prevention programs, including prevention 
            of exposure to unsafe levels of agricultural chemicals 
            including pesticides.
        ``(3) Medically underserved populations.--
            ``(A) In general.--The term `medically underserved 
        population' means the population of an urban or rural area 
        designated by the Secretary as an area with a shortage of 
        personal health services or a population group designated by 
        the Secretary as having a shortage of such services.
            ``(B) Criteria.--In carrying out subparagraph (A), the 
        Secretary shall prescribe criteria for determining the specific 
        shortages of personal health services of an area or population 
        group. Such criteria shall--
                ``(i) take into account comments received by the 
            Secretary from the chief executive officer of a State and 
            local officials in a State; and
                ``(ii) include factors indicative of the health status 
            of a population group or residents of an area, the ability 
            of the residents of an area or of a population group to pay 
            for health services and their accessibility to them, and 
            the availability of health professionals to residents of an 
            area or to a population group.
            ``(C) Limitation.--The Secretary may not designate a 
        medically underserved population in a State or terminate the 
        designation of such a population unless, prior to such 
        designation or termination, the Secretary provides reasonable 
        notice and opportunity for comment and consults with--
                ``(i) the chief executive officer of such State;
                ``(ii) local officials in such State; and
                ``(iii) the organization, if any, which represents a 
            majority of health centers in such State.
            ``(D) Permissible designation.--The Secretary may designate 
        a medically underserved population that does not meet the 
        criteria established under subparagraph (B) if the chief 
        executive officer of the State in which such population is 
        located and local officials of such State recommend the 
        designation of such population based on unusual local 
        conditions which are a barrier to access to or the availability 
        of personal health services.
    ``(c) Planning Grants.--
        ``(1) In general.--
            ``(A) Centers.--The Secretary may make grants to public and 
        nonprofit private entities for projects to plan and develop 
        health centers which will serve medically underserved 
        populations. A project for which a grant may be made under this 
        subsection may include the cost of the acquisition and lease of 
        buildings and equipment (including the costs of amortizing the 
        principal of, and paying the interest on, loans) and shall 
        include--
                ``(i) an assessment of the need that the population 
            proposed to be served by the health center for which the 
            project is undertaken has for required primary health 
            services and additional health services;
                ``(ii) the design of a health center program for such 
            population based on such assessment;
                ``(iii) efforts to secure, within the proposed 
            catchment area of such center, financial and professional 
            assistance and support for the project;
                ``(iv) initiation and encouragement of continuing 
            community involvement in the development and operation of 
            the project; and
                ``(v) proposed linkages between the center and other 
            appropriate provider entities, such as health departments, 
            local hospitals, and rural health clinics, to provide 
            better coordinated, higher quality, and more cost-effective 
            health care services.
            ``(B) Comprehensive service delivery networks and plans.--
        The Secretary may make grants to health centers that receive 
        assistance under this section to enable the centers to plan and 
        develop a network or plan for the provision of health services, 
        which may include the provision of health services on a prepaid 
        basis or through another managed care arrangement, to some or 
        to all of the individuals which the centers serve. Such a grant 
        may only be made for such a center if--
                ``(i) the center has received grants under subsection 
            (e)(1)(A) for at least 2 consecutive years preceding the 
            year of the grant under this subparagraph or has otherwise 
            demonstrated, as required by the Secretary, that such 
            center has been providing primary care services for at 
            least the 2 consecutive years immediately preceding such 
            year; and
                ``(ii) the center provides assurances satisfactory to 
            the Secretary that the provision of such services on a 
            prepaid basis, or under another managed care arrangement, 
            will not result in the diminution of the level or quality 
            of health services provided to the medically underserved 
            population served prior to the grant under this 
            subparagraph.
        Any such grant may include the acquisition and lease of 
        buildings and equipment which may include data and information 
        systems (including the costs of amortizing the principal of, 
        and paying the interest on, loans), and providing training and 
        technical assistance related to the provision of health 
        services on a prepaid basis or under another managed care 
        arrangement, and for other purposes that promote the 
        development of managed care networks and plans.
        ``(2) Limitation.--Not more than two grants may be made under 
    this subsection for the same project, except that upon a showing of 
    good cause, the Secretary may make additional grant awards.
    ``(d) Managed Care Loan Guarantee Program.--
        ``(1) Establishment.--
            ``(A) In general.--The Secretary shall establish a program 
        under which the Secretary may, in accordance with this 
        subsection and to the extent that appropriations are provided 
        in advance for such program, guarantee the principal and 
        interest on loans made by non-Federal lenders to health centers 
        funded under this section for the costs of developing and 
        operating managed care networks or plans.
            ``(B) Use of funds.--Loan funds guaranteed under this 
        subsection may be used--
                ``(i) to establish reserves for the furnishing of 
            services on a pre-paid basis; or
                ``(ii) for costs incurred by the center or centers, 
            otherwise permitted under this section, as the Secretary 
            determines are necessary to enable a center or centers to 
            develop, operate, and own the network or plan.
            ``(C) Publication of guidance.--Prior to considering an 
        application submitted under this subsection, the Secretary 
        shall publish guidelines to provide guidance on the 
        implementation of this section. The Secretary shall make such 
        guidelines available to the universe of parties affected under 
        this subsection, distribute such guidelines to such parties 
        upon the request of such parties, and provide a copy of such 
        guidelines to the appropriate committees of Congress.
        ``(2) Protection of financial interests.--
            ``(A) In general.--The Secretary may not approve a loan 
        guarantee for a project under this subsection unless the 
        Secretary determines that--
                ``(i) the terms, conditions, security (if any), and 
            schedule and amount of repayments with respect to the loan 
            are sufficient to protect the financial interests of the 
            United States and are otherwise reasonable, including a 
            determination that the rate of interest does not exceed 
            such percent per annum on the principal obligation 
            outstanding as the Secretary determines to be reasonable, 
            taking into account the range of interest rates prevailing 
            in the private market for similar loans and the risks 
            assumed by the United States, except that the Secretary may 
            not require as security any center asset that is, or may 
            be, needed by the center or centers involved to provide 
            health services;
                ``(ii) the loan would not be available on reasonable 
            terms and conditions without the guarantee under this 
            subsection; and
                ``(iii) amounts appropriated for the program under this 
            subsection are sufficient to provide loan guarantees under 
            this subsection.
            ``(B) Recovery of payments.--
                ``(i) In general.--The United States shall be entitled 
            to recover from the applicant for a loan guarantee under 
            this subsection the amount of any payment made pursuant to 
            such guarantee, unless the Secretary for good cause waives 
            such right of recovery (subject to appropriations remaining 
            available to permit such a waiver) and, upon making any 
            such payment, the United States shall be subrogated to all 
            of the rights of the recipient of the payments with respect 
            to which the guarantee was made. Amounts recovered under 
            this clause shall be credited as reimbursements to the 
            financing account of the program.
                ``(ii) Modification of terms and conditions.--To the 
            extent permitted by clause (iii) and subject to the 
            requirements of section 504(e) of the Credit Reform Act of 
            1990 (2 U.S.C. 661c(e)), any terms and conditions 
            applicable to a loan guarantee under this subsection 
            (including terms and conditions imposed under clause (iv)) 
            may be modified or waived by the Secretary to the extent 
            the Secretary determines it to be consistent with the 
            financial interest of the United States.
                ``(iii) Incontestability.--Any loan guarantee made by 
            the Secretary under this subsection shall be 
            incontestable--

                    ``(I) in the hands of an applicant on whose behalf 
                such guarantee is made unless the applicant engaged in 
                fraud or misrepresentation in securing such guarantee; 
                and
                    ``(II) as to any person (or successor in interest) 
                who makes or contracts to make a loan to such applicant 
                in reliance thereon unless such person (or successor in 
                interest) engaged in fraud or misrepresentation in 
                making or contracting to make such loan.

                ``(iv) Further terms and conditions.--Guarantees of 
            loans under this subsection shall be subject to such 
            further terms and conditions as the Secretary determines to 
            be necessary to assure that the purposes of this section 
            will be achieved.
        ``(3) Loan origination fees.--
            ``(A) In general.--The Secretary shall collect a loan 
        origination fee with respect to loans to be guaranteed under 
        this subsection, except as provided in subparagraph (C).
            ``(B) Amount.--The amount of a loan origination fee 
        collected by the Secretary under subparagraph (A) shall be 
        equal to the estimated long term cost of the loan guarantees 
        involved to the Federal Government (excluding administrative 
        costs), calculated on a net present value basis, after taking 
        into account any appropriations that may be made for the 
        purpose of offsetting such costs, and in accordance with the 
        criteria used to award loan guarantees under this subsection.
            ``(C) Waiver.--The Secretary may waive the loan origination 
        fee for a health center applicant who demonstrates to the 
        Secretary that the applicant will be unable to meet the 
        conditions of the loan if the applicant incurs the additional 
        cost of the fee.
        ``(4) Defaults.--
            ``(A) In general.--Subject to the requirements of the 
        Credit Reform Act of 1990 (2 U.S.C. 661 et seq.), the Secretary 
        may take such action as may be necessary to prevent a default 
        on a loan guaranteed under this subsection, including the 
        waiver of regulatory conditions, deferral of loan payments, 
        renegotiation of loans, and the expenditure of funds for 
        technical and consultative assistance, for the temporary 
        payment of the interest and principal on such a loan, and for 
        other purposes. Any such expenditure made under the preceding 
        sentence on behalf of a health center or centers shall be made 
        under such terms and conditions as the Secretary shall 
        prescribe, including the implementation of such organizational, 
        operational, and financial reforms as the Secretary determines 
        are appropriate and the disclosure of such financial or other 
        information as the Secretary may require to determine the 
        extent of the implementation of such reforms.
            ``(B) Foreclosure.--The Secretary may take such action, 
        consistent with State law respecting foreclosure procedures 
        and, with respect to reserves required for furnishing services 
        on a prepaid basis, subject to the consent of the affected 
        States, as the Secretary determines appropriate to protect the 
        interest of the United States in the event of a default on a 
        loan guaranteed under this subsection, except that the 
        Secretary may only foreclose on assets offered as security (if 
        any) in accordance with paragraph (2)(A)(i).
        ``(5) Limitation.--Not more than one loan guarantee may be made 
    under this subsection for the same network or plan, except that 
    upon a showing of good cause the Secretary may make additional loan 
    guarantees.
        ``(6) Annual report.--Not later than April 1, 1998, and each 
    April 1 thereafter, the Secretary shall prepare and submit to the 
    appropriate committees of Congress a report concerning loan 
    guarantees provided under this subsection. Such report shall 
    include--
            ``(A) a description of the number, amount, and use of funds 
        received under each loan guarantee provided under this 
        subsection;
            ``(B) a description of any defaults with respect to such 
        loans and an analysis of the reasons for such defaults, if any; 
        and
            ``(C) a description of the steps that may have been taken 
        by the Secretary to assist an entity in avoiding such a 
        default.
        ``(7) Program evaluation.--Not later than June 30, 1999, the 
    Secretary shall prepare and submit to the appropriate committees of 
    Congress a report containing an evaluation of the program 
    authorized under this subsection. Such evaluation shall include a 
    recommendation with respect to whether or not the loan guarantee 
    program under this subsection should be continued and, if so, any 
    modifications that should be made to such program.
        ``(8) Authorization of appropriations.--There are authorized to 
    be appropriated to carry out this subsection such sums as may be 
    necessary.
    ``(e) Operating Grants.--
        ``(1) Authority.--
            ``(A) In general.--The Secretary may make grants for the 
        costs of the operation of public and nonprofit private health 
        centers that provide health services to medically underserved 
        populations.
            ``(B) Entities that fail to meet certain requirements.--The 
        Secretary may make grants, for a period of not to exceed 2 
        years, for the costs of the operation of public and nonprofit 
        private entities which provide health services to medically 
        underserved populations but with respect to which the Secretary 
        is unable to make each of the determinations required by 
        subsection (j)(3).
        ``(2) Use of funds.--The costs for which a grant may be made 
    under subparagraph (A) or (B) of paragraph (1) may include the 
    costs of acquiring and leasing buildings and equipment (including 
    the costs of amortizing the principal of, and paying interest on, 
    loans), and the costs of providing training related to the 
    provision of required primary health services and additional health 
    services and to the management of health center programs.
        ``(3) Construction.--The Secretary may award grants which may 
    be used to pay the costs associated with expanding and modernizing 
    existing buildings or constructing new buildings (including the 
    costs of amortizing the principal of, and paying the interest on, 
    loans) for projects approved prior to October 1, 1996.
        ``(4) Limitation.--Not more than two grants may be made under 
    subparagraph (B) of paragraph (1) for the same entity.
        ``(5) Amount.--
            ``(A) In general.--The amount of any grant made in any 
        fiscal year under paragraph (1) to a health center shall be 
        determined by the Secretary, but may not exceed the amount by 
        which the costs of operation of the center in such fiscal year 
        exceed the total of--
                ``(i) State, local, and other operational funding 
            provided to the center; and
                ``(ii) the fees, premiums, and third-party 
            reimbursements, which the center may reasonably be expected 
            to receive for its operations in such fiscal year.
            ``(B) Payments.--Payments under grants under subparagraph 
        (A) or (B) of paragraph (1) shall be made in advance or by way 
        of reimbursement and in such installments as the Secretary 
        finds necessary and adjustments may be made for overpayments or 
        underpayments.
            ``(C) Use of nongrant funds.--Nongrant funds described in 
        clauses (i) and (ii) of subparagraph (A), including any such 
        funds in excess of those originally expected, shall be used as 
        permitted under this section, and may be used for such other 
        purposes as are not specifically prohibited under this section 
        if such use furthers the objectives of the project.
    ``(f) Infant Mortality Grants.--
        ``(1) In general.--The Secretary may make grants to health 
    centers for the purpose of assisting such centers in--
            ``(A) providing comprehensive health care and support 
        services for the reduction of--
                ``(i) the incidence of infant mortality; and
                ``(ii) morbidity among children who are less than 3 
            years of age; and
            ``(B) developing and coordinating service and referral 
        arrangements between health centers and other entities for the 
        health management of pregnant women and children described in 
        subparagraph (A).
        ``(2) Priority.--In making grants under this subsection the 
    Secretary shall give priority to health centers providing services 
    to any medically underserved population among which there is a 
    substantial incidence of infant mortality or among which there is a 
    significant increase in the incidence of infant mortality.
        ``(3) Requirements.--The Secretary may make a grant under this 
    subsection only if the health center involved agrees that--
            ``(A) the center will coordinate the provision of services 
        under the grant to each of the recipients of the services;
            ``(B) such services will be continuous for each such 
        recipient;
            ``(C) the center will provide follow-up services for 
        individuals who are referred by the center for services 
        described in paragraph (1);
            ``(D) the grant will be expended to supplement, and not 
        supplant, the expenditures of the center for primary health 
        services (including prenatal care) with respect to the purpose 
        described in this subsection; and
            ``(E) the center will coordinate the provision of services 
        with other maternal and child health providers operating in the 
        catchment area.
    ``(g) Migratory and Seasonal Agricultural Workers.--
        ``(1) In general.--The Secretary may award grants for the 
    purposes described in subsections (c), (e), and (f) for the 
    planning and delivery of services to a special medically 
    underserved population comprised of--
            ``(A) migratory agricultural workers, seasonal agricultural 
        workers, and members of the families of such migratory and 
        seasonal agricultural workers who are within a designated 
        catchment area; and
            ``(B) individuals who have previously been migratory 
        agricultural workers but who no longer meet the requirements of 
        subparagraph (A) of paragraph (3) because of age or disability 
        and members of the families of such individuals who are within 
        such catchment area.
        ``(2) Environmental concerns.--The Secretary may enter into 
    grants or contracts under this subsection with public and private 
    entities to--
            ``(A) assist the States in the implementation and 
        enforcement of acceptable environmental health standards, 
        including enforcement of standards for sanitation in migratory 
        agricultural worker labor camps, and applicable Federal and 
        State pesticide control standards; and
            ``(B) conduct projects and studies to assist the several 
        States and entities which have received grants or contracts 
        under this section in the assessment of problems related to 
        camp and field sanitation, exposure to unsafe levels of 
        agricultural chemicals including pesticides, and other 
        environmental health hazards to which migratory agricultural 
        workers and members of their families are exposed.
        ``(3) Definitions.--For purposes of this subsection:
            ``(A) Migratory agricultural worker.--The term `migratory 
        agricultural worker' means an individual whose principal 
        employment is in agriculture on a seasonal basis, who has been 
        so employed within the last 24 months, and who establishes for 
        the purposes of such employment a temporary abode.
            ``(B) Seasonal agricultural worker.--The term `seasonal 
        agricultural worker' means an individual whose principal 
        employment is in agriculture on a seasonal basis and who is not 
        a migratory agricultural worker.
            ``(C) Agriculture.--The term `agriculture' means farming in 
        all its branches, including--
                ``(i) cultivation and tillage of the soil;
                ``(ii) the production, cultivation, growing, and 
            harvesting of any commodity grown on, in, or as an adjunct 
            to or part of a commodity grown in or on, the land; and
                ``(iii) any practice (including preparation and 
            processing for market and delivery to storage or to market 
            or to carriers for transportation to market) performed by a 
            farmer or on a farm incident to or in conjunction with an 
            activity described in clause (ii).
    ``(h) Homeless Population.--
        ``(1) In general.--The Secretary may award grants for the 
    purposes described in subsections (c), (e), and (f) for the 
    planning and delivery of services to a special medically 
    underserved population comprised of homeless individuals, including 
    grants for innovative programs that provide outreach and 
    comprehensive primary health services to homeless children and 
    children at risk of homelessness.
        ``(2) Required services.--In addition to required primary 
    health services (as defined in subsection (b)(1)), an entity that 
    receives a grant under this subsection shall be required to provide 
    substance abuse services as a condition of such grant.
        ``(3) Supplement not supplant requirement.--A grant awarded 
    under this subsection shall be expended to supplement, and not 
    supplant, the expenditures of the health center and the value of in 
    kind contributions for the delivery of services to the population 
    described in paragraph (1).
        ``(4) Definitions.--For purposes of this section:
            ``(A) Homeless individual.--The term `homeless individual' 
        means an individual who lacks housing (without regard to 
        whether the individual is a member of a family), including an 
        individual whose primary residence during the night is a 
        supervised public or private facility that provides temporary 
        living accommodations and an individual who is a resident in 
        transitional housing.
            ``(B) Substance abuse.--The term `substance abuse' has the 
        same meaning given such term in section 534(4).
            ``(C) Substance abuse services.--The term `substance abuse 
        services' includes detoxification and residential treatment for 
        substance abuse provided in settings other than hospitals.
    ``(i) Residents of Public Housing.--
        ``(1) In general.--The Secretary may award grants for the 
    purposes described in subsections (c), (e), and (f) for the 
    planning and delivery of services to a special medically 
    underserved population comprised of residents of public housing 
    (such term, for purposes of this subsection, shall have the same 
    meaning given such term in section 3(b)(1) of the United States 
    Housing Act of 1937) and individuals living in areas immediately 
    accessible to such public housing.
        ``(2) Supplement not supplant.--A grant awarded under this 
    subsection shall be expended to supplement, and not supplant, the 
    expenditures of the health center and the value of in kind 
    contributions for the delivery of services to the population 
    described in paragraph (1).
        ``(3) Consultation with residents.--The Secretary may not make 
    a grant under paragraph (1) unless, with respect to the residents 
    of the public housing involved, the applicant for the grant--
            ``(A) has consulted with the residents in the preparation 
        of the application for the grant; and
            ``(B) agrees to provide for ongoing consultation with the 
        residents regarding the planning and administration of the 
        program carried out with the grant.
    ``(j) Applications.--
        ``(1) Submission.--No grant may be made under this section 
    unless an application therefore is submitted to, and approved by, 
    the Secretary. Such an application shall be submitted in such form 
    and manner and shall contain such information as the Secretary 
    shall prescribe.
        ``(2) Description of need.--An application for a grant under 
    subparagraph (A) or (B) of subsection (e)(1) for a health center 
    shall include--
            ``(A) a description of the need for health services in the 
        catchment area of the center;
            ``(B) a demonstration by the applicant that the area or the 
        population group to be served by the applicant has a shortage 
        of personal health services; and
            ``(C) a demonstration that the center will be located so 
        that it will provide services to the greatest number of 
        individuals residing in the catchment area or included in such 
        population group.
    Such a demonstration shall be made on the basis of the criteria 
    prescribed by the Secretary under subsection (b)(3) or on any other 
    criteria which the Secretary may prescribe to determine if the area 
    or population group to be served by the applicant has a shortage of 
    personal health services. In considering an application for a grant 
    under subparagraph (A) or (B) of subsection (e)(1), the Secretary 
    may require as a condition to the approval of such application an 
    assurance that the applicant will provide any health service 
    defined under paragraphs (1) and (2) of subsection (b) that the 
    Secretary finds is needed to meet specific health needs of the area 
    to be served by the applicant. Such a finding shall be made in 
    writing and a copy shall be provided to the applicant.
        ``(3) Requirements.--Except as provided in subsection 
    (e)(1)(B), the Secretary may not approve an application for a grant 
    under subparagraph (A) or (B) of subsection (e)(1) unless the 
    Secretary determines that the entity for which the application is 
    submitted is a health center (within the meaning of subsection (a)) 
    and that--
            ``(A) the required primary health services of the center 
        will be available and accessible in the catchment area of the 
        center promptly, as appropriate, and in a manner which assures 
        continuity;
            ``(B) the center has made and will continue to make every 
        reasonable effort to establish and maintain collaborative 
        relationships with other health care providers in the catchment 
        area of the center;
            ``(C) the center will have an ongoing quality improvement 
        system that includes clinical services and management, and that 
        maintains the confidentiality of patient records;
            ``(D) the center will demonstrate its financial 
        responsibility by the use of such accounting procedures and 
        other requirements as may be prescribed by the Secretary;
            ``(E) the center--
                ``(i) has or will have a contractual or other 
            arrangement with the agency of the State, in which it 
            provides services, which administers or supervises the 
            administration of a State plan approved under title XIX of 
            the Social Security Act for the payment of all or a part of 
            the center's costs in providing health services to persons 
            who are eligible for medical assistance under such a State 
            plan; or
                ``(ii) has made or will make every reasonable effort to 
            enter into such an arrangement;
            ``(F) the center has made or will make and will continue to 
        make every reasonable effort to collect appropriate 
        reimbursement for its costs in providing health services to 
        persons who are entitled to insurance benefits under title 
        XVIII of the Social Security Act, to medical assistance under a 
        State plan approved under title XIX of such Act, or to 
        assistance for medical expenses under any other public 
        assistance program or private health insurance program;
            ``(G) the center--
                ``(i) has prepared a schedule of fees or payments for 
            the provision of its services consistent with locally 
            prevailing rates or charges and designed to cover its 
            reasonable costs of operation and has prepared a 
            corresponding schedule of discounts to be applied to the 
            payment of such fees or payments, which discounts are 
            adjusted on the basis of the patient's ability to pay;
                ``(ii) has made and will continue to make every 
            reasonable effort--

                    ``(I) to secure from patients payment for services 
                in accordance with such schedules; and
                    ``(II) to collect reimbursement for health services 
                to persons described in subparagraph (F) on the basis 
                of the full amount of fees and payments for such 
                services without application of any discount; and

                ``(iii) has submitted to the Secretary such reports as 
            the Secretary may require to determine compliance with this 
            subparagraph;
            ``(H) the center has established a governing board which 
        except in the case of an entity operated by an Indian tribe or 
        tribal or Indian organization under the Indian Self-
        Determination Act or an urban Indian organization under the 
        Indian Health Care Improvement Act (25 U.S.C. 1651 et seq.)--
                ``(i) is composed of individuals, a majority of whom 
            are being served by the center and who, as a group, 
            represent the individuals being served by the center;
                ``(ii) meets at least once a month, selects the 
            services to be provided by the center, schedules the hours 
            during which such services will be provided, approves the 
            center's annual budget, approves the selection of a 
            director for the center, and, except in the case of a 
            governing board of a public center (as defined in the 
            second sentence of this paragraph), establishes general 
            policies for the center; and
                ``(iii) in the case of an application for a second or 
            subsequent grant for a public center, has approved the 
            application or if the governing body has not approved the 
            application, the failure of the governing body to approve 
            the application was unreasonable;
        except that, upon a showing of good cause the Secretary shall 
        waive, for the length of the project period, all or part of the 
        requirements of this subparagraph in the case of a health 
        center that receives a grant pursuant to subsection (g), (h), 
        (i), or (p);
            ``(I) the center has developed--
                ``(i) an overall plan and budget that meets the 
            requirements of the Secretary; and
                ``(ii) an effective procedure for compiling and 
            reporting to the Secretary such statistics and other 
            information as the Secretary may require relating to--

                    ``(I) the costs of its operations;
                    ``(II) the patterns of use of its services;
                    ``(III) the availability, accessibility, and 
                acceptability of its services; and
                    ``(IV) such other matters relating to operations of 
                the applicant as the Secretary may require;

            ``(J) the center will review periodically its catchment 
        area to--
                ``(i) ensure that the size of such area is such that 
            the services to be provided through the center (including 
            any satellite) are available and accessible to the 
            residents of the area promptly and as appropriate;
                ``(ii) ensure that the boundaries of such area conform, 
            to the extent practicable, to relevant boundaries of 
            political subdivisions, school districts, and Federal and 
            State health and social service programs; and
                ``(iii) ensure that the boundaries of such area 
            eliminate, to the extent possible, barriers to access to 
            the services of the center, including barriers resulting 
            from the area's physical characteristics, its residential 
            patterns, its economic and social grouping, and available 
            transportation;
            ``(K) in the case of a center which serves a population 
        including a substantial proportion of individuals of limited 
        English-speaking ability, the center has--
                ``(i) developed a plan and made arrangements responsive 
            to the needs of such population for providing services to 
            the extent practicable in the language and cultural context 
            most appropriate to such individuals; and
                ``(ii) identified an individual on its staff who is 
            fluent in both that language and in English and whose 
            responsibilities shall include providing guidance to such 
            individuals and to appropriate staff members with respect 
            to cultural sensitivities and bridging linguistic and 
            cultural differences; and
            ``(L) the center, has developed an ongoing referral 
        relationship with one or more hospitals.
    For purposes of subparagraph (H), the term `public center' means a 
    health center funded (or to be funded) through a grant under this 
    section to a public agency.
        ``(4) Approval of new or expanded service applications.--The 
    Secretary shall approve applications for grants under subparagraph 
    (A) or (B) of subsection (e)(1) for health centers which--
            ``(A) have not received a previous grant under such 
        subsection; or
            ``(B) have applied for such a grant to expand their 
        services;
    in such a manner that the ratio of the medically underserved 
    populations in rural areas which may be expected to use the 
    services provided by such centers to the medically underserved 
    populations in urban areas which may be expected to use the 
    services provided by such centers is not less than two to three or 
    greater than three to two.
    ``(k) Technical and Other Assistance.--The Secretary may provide 
(either through the Department of Health and Human Services or by grant 
or contract) all necessary technical and other nonfinancial assistance 
(including fiscal and program management assistance and training in 
such management) to any public or private nonprofit entity to assist 
entities in developing plans for, or operating as, health centers, and 
in meeting the requirements of subsection (j)(2).
    ``(l) Authorization of Appropriations.--
        ``(1) In general.--For the purpose of carrying out this 
    section, in addition to the amounts authorized to be appropriated 
    under subsection (d), there are authorized to be appropriated 
    $802,124,000 for fiscal year 1997, and such sums as may be 
    necessary for each of the fiscal years 1998 through 2001.
        ``(2) Special provisions.--
            ``(A) Public centers.--The Secretary may not expend in any 
        fiscal year, for grants under this section to public centers 
        (as defined in the second sentence of subsection (j)(3)) the 
        governing boards of which (as described in subsection 
        (j)(3)(G)(ii)) do not establish general policies for such 
        centers, an amount which exceeds 5 percent of the amounts 
        appropriated under this section for that fiscal year. For 
        purposes of applying the preceding sentence, the term `public 
        centers' shall not include health centers that receive grants 
        pursuant to subsection (h) or (i).
            ``(B) Distribution of grants.--
                ``(i) Fiscal year 1997.--For fiscal year 1997, the 
            Secretary, in awarding grants under this section shall 
            ensure that the amounts made available under each of 
            subsections (g), (h), and (i) in such fiscal year bears the 
            same relationship to the total amount appropriated for such 
            fiscal year under paragraph (1) as the amounts appropriated 
            for fiscal year 1996 under each of sections 329, 340, and 
            340A (as such sections existed one day prior to the date of 
            enactment of this section) bears to the total amount 
            appropriated under sections 329, 330, 340, and 340A (as 
            such sections existed one day prior to the date of 
            enactment of this section) for such fiscal year.
                ``(ii) Fiscal years 1998 and 1999.--For each of the 
            fiscal years 1998 and 1999, the Secretary, in awarding 
            grants under this section shall ensure that the proportion 
            of the amounts made available under each of subsections 
            (g), (h), and (i) is equal to the proportion of amounts 
            made available under each such subsection for the previous 
            fiscal year, as such amounts relate to the total amounts 
            appropriated for the previous fiscal year involved, 
            increased or decreased by not more than 10 percent.
        ``(3) Funding report.--The Secretary shall annually prepare and 
    submit to the appropriate committees of Congress a report 
    concerning the distribution of funds under this section that are 
    provided to meet the health care needs of medically underserved 
    populations, including the homeless, residents of public housing, 
    and migratory and seasonal agricultural workers, and the 
    appropriateness of the delivery systems involved in responding to 
    the needs of the particular populations. Such report shall include 
    an assessment of the relative health care access needs of the 
    targeted populations and the rationale for any substantial changes 
    in the distribution of funds.
    ``(m) Memorandum of Agreement.--In carrying out this section, the 
Secretary may enter into a memorandum of agreement with a State. Such 
memorandum may include, where appropriate, provisions permitting such 
State to--
        ``(1) analyze the need for primary health services for 
    medically underserved populations within such State;
        ``(2) assist in the planning and development of new health 
    centers;
        ``(3) review and comment upon annual program plans and budgets 
    of health centers, including comments upon allocations of health 
    care resources in the State;
        ``(4) assist health centers in the development of clinical 
    practices and fiscal and administrative systems through a technical 
    assistance plan which is responsive to the requests of health 
    centers; and
        ``(5) share information and data relevant to the operation of 
    new and existing health centers.
    ``(n) Records.--
        ``(1) In general.--Each entity which receives a grant under 
    subsection (e) shall establish and maintain such records as the 
    Secretary shall require.
        ``(2) Availability.--Each entity which is required to establish 
    and maintain records under this subsection shall make such books, 
    documents, papers, and records available to the Secretary or the 
    Comptroller General of the United States, or any of their duly 
    authorized representatives, for examination, copying or mechanical 
    reproduction on or off the premises of such entity upon a 
    reasonable request therefore. The Secretary and the Comptroller 
    General of the United States, or any of their duly authorized 
    representatives, shall have the authority to conduct such 
    examination, copying, and reproduction.
    ``(o) Delegation of Authority.--The Secretary may delegate the 
authority to administer the programs authorized by this section to any 
office, except that the authority to enter into, modify, or issue 
approvals with respect to grants or contracts may be delegated only 
within the central office of the Health Resources and Services 
Administration.
    ``(p) Special Consideration.--In making grants under this section, 
the Secretary shall give special consideration to the unique needs of 
sparsely populated rural areas, including giving priority in the 
awarding of grants for new health centers under subsections (c) and 
(e), and the granting of waivers as appropriate and permitted under 
subsections (b)(1)(B)(i) and (j)(3)(G).
    ``(q) Audits.--
        ``(1) In general.--Each entity which receives a grant under 
    this section shall provide for an independent annual financial 
    audit of any books, accounts, financial records, files, and other 
    papers and property which relate to the disposition or use of the 
    funds received under such grant and such other funds received by or 
    allocated to the project for which such grant was made. For 
    purposes of assuring accurate, current, and complete disclosure of 
    the disposition or use of the funds received, each such audit shall 
    be conducted in accordance with generally accepted accounting 
    principles. Each audit shall evaluate--
            ``(A) the entity's implementation of the guidelines 
        established by the Secretary respecting cost accounting,
            ``(B) the processes used by the entity to meet the 
        financial and program reporting requirements of the Secretary, 
        and
            ``(C) the billing and collection procedures of the entity 
        and the relation of the procedures to its fee schedule and 
        schedule of discounts and to the availability of health 
        insurance and public programs to pay for the health services it 
        provides.
    A report of each such audit shall be filed with the Secretary at 
    such time and in such manner as the Secretary may require.
        ``(2) Records.--Each entity which receives a grant under this 
    section shall establish and maintain such records as the Secretary 
    shall by regulation require to facilitate the audit required by 
    paragraph (1). The Secretary may specify by regulation the form and 
    manner in which such records shall be established and maintained.
        ``(3) Availability of records.--Each entity which is required 
    to establish and maintain records or to provide for and audit under 
    this subsection shall make such books, documents, papers, and 
    records available to the Secretary or the Comptroller General of 
    the United States, or any of their duly authorized representatives, 
    for examination, copying or mechanical reproduction on or off the 
    premises of such entity upon a reasonable request therefore. The 
    Secretary and the Comptroller General of the United States, or any 
    of their duly authorized representatives, shall have the authority 
    to conduct such examination, copying, and reproduction.
        ``(4) Waiver.--The Secretary may, under appropriate 
    circumstances, waive the application of all or part of the 
    requirements of this subsection with respect to an entity.''.
SEC. 3. RURAL HEALTH OUTREACH, NETWORK DEVELOPMENT, AND TELEMEDICINE 
GRANT PROGRAM.
    (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 2) 
is further amended by adding at the end thereof the following new 
section:
``SEC. 330A. RURAL HEALTH OUTREACH, NETWORK DEVELOPMENT, AND 
TELEMEDICINE GRANT PROGRAM.
    ``(a) Administration.--The rural health services outreach 
demonstration grant program established under section 301 shall be 
administered by the Office of Rural Health Policy (of the Health 
Resources and Services Administration), in consultation with State 
rural health offices or other appropriate State governmental entities.
    ``(b) Grants.--Under the program referred to in subsection (a), the 
Secretary, acting through the Director of the Office of Rural Health 
Policy, may award grants to expand access to, coordinate, restrain the 
cost of, and improve the quality of essential health care services, 
including preventive and emergency services, through the development of 
integrated health care delivery systems or networks in rural areas and 
regions.
    ``(c) Eligible Networks.--
        ``(1) Outreach networks.--To be eligible to receive a grant 
    under this section, an entity shall--
            ``(A) be a rural public or nonprofit private entity that is 
        or represents a network or potential network that includes 
        three or more health care providers or other entities that 
        provide or support the delivery of health care services; and
            ``(B) in consultation with the State office of rural health 
        or other appropriate State entity, prepare and submit to the 
        Secretary an application, at such time, in such manner, and 
        containing such information as the Secretary may require, 
        including--
                ``(i) a description of the activities which the 
            applicant intends to carry out using amounts provided under 
            the grant;
                ``(ii) a plan for continuing the project after Federal 
            support is ended;
                ``(iii) a description of the manner in which the 
            activities funded under the grant will meet health care 
            needs of underserved rural populations within the State; 
            and
                ``(iv) a description of how the local community or 
            region to be served by the network or proposed network will 
            be involved in the development and ongoing operations of 
            the network.
        ``(2) For-profit entities.--An eligible network may include 
    for-profit entities so long as the network grantee is a nonprofit 
    entity.
        ``(3) Telemedicine networks.--
            ``(A) In general.--An entity that is a health care provider 
        and a member of an existing or proposed telemedicine network, 
        or an entity that is a consortium of health care providers that 
        are members of an existing or proposed telemedicine network 
        shall be eligible for a grant under this section.
            ``(B) Requirement.--A telemedicine network referred to in 
        subparagraph (A) shall, at a minimum, be composed of--
                ``(i) a multispecialty entity that is located in an 
            urban or rural area, which can provide 24-hour a day access 
            to a range of specialty care; and
                ``(ii) at least two rural health care facilities, which 
            may include rural hospitals, rural physician offices, rural 
            health clinics, rural community health clinics, and rural 
            nursing homes.
    ``(d) Preference.--In awarding grants under this section, the 
Secretary shall give preference to applicant networks that include--
        ``(1) a majority of the health care providers serving in the 
    area or region to be served by the network;
        ``(2) any federally qualified health centers, rural health 
    clinics, and local public health departments serving in the area or 
    region;
        ``(3) outpatient mental health providers serving in the area or 
    region; or
        ``(4) appropriate social service providers, such as agencies on 
    aging, school systems, and providers under the women, infants, and 
    children program, to improve access to and coordination of health 
    care services.
    ``(e) Use of Funds.--
        ``(1) In general.--Amounts provided under grants awarded under 
    this section shall be used--
            ``(A) for the planning and development of integrated self-
        sustaining health care networks; and
            ``(B) for the initial provision of services.
        ``(2) Expenditures in rural areas.--
            ``(A) In general.--In awarding a grant under this section, 
        the Secretary shall ensure that not less than 50 percent of the 
        grant award is expended in a rural area or to provide services 
        to residents of rural areas.
            ``(B) Telemedicine networks.--An entity described in 
        subsection (c)(3) may not use in excess of--
                ``(i) 40 percent of the amounts provided under a grant 
            under this section to carry out activities under paragraph 
            (3)(A)(iii); and
                ``(ii) 20 percent of the amounts provided under a grant 
            under this section to pay for the indirect costs associated 
            with carrying out the purposes of such grant.
        ``(3) Telemedicine networks.--
            ``(A) In general.--An entity described in subsection 
        (c)(3), may use amounts provided under a grant under this 
        section to--
                ``(i) demonstrate the use of telemedicine in 
            facilitating the development of rural health care networks 
            and for improving access to health care services for rural 
            citizens;
                ``(ii) provide a baseline of information for a 
            systematic evaluation of telemedicine systems serving rural 
            areas;
                ``(iii) purchase or lease and install equipment; and
                ``(iv) operate the telemedicine system and evaluate the 
            telemedicine system.
            ``(B) Limitations.--An entity described in subsection 
        (c)(3), may not use amounts provided under a grant under this 
        section--
                ``(i) to build or acquire real property;
                ``(ii) purchase or install transmission equipment (such 
            as laying cable or telephone lines, microwave towers, 
            satellite dishes, amplifiers, and digital switching 
            equipment); or
                ``(iii) for construction, except that such funds may be 
            expended for minor renovations relating to the installation 
            of equipment;
    ``(f) Term of Grants.--Funding may not be provided to a network 
under this section for in excess of a 3-year period.
    ``(g) Authorization of Appropriations.--For the purpose of carrying 
out this section there are authorized to be appropriated $36,000,000 
for fiscal year 1997, and such sums as may be necessary for each of the 
fiscal years 1998 through 2001.''.
    (b) Transition.--The Secretary of Health and Human Services shall 
ensure the continued funding of grants made, or contracts or 
cooperative agreements entered into, under subpart I of part D of title 
III of the Public Health Service Act (42 U.S.C. 254b et seq.) (as such 
subpart existed on the day prior to the date of enactment of this Act), 
until the expiration of the grant period or the term of the contract or 
cooperative agreement. Such funding shall be continued under the same 
terms and conditions as were in effect on the date on which the grant, 
contract or cooperative agreement was awarded, subject to the 
availability of appropriations.

SEC. 4. TECHNICAL AND CONFORMING AMENDMENTS.

    (a) In General.--The Public Health Service Act is amended--
        (1) in section 224(g)(4) (42 U.S.C. 233(g)(4)), by striking 
    ``under'' and all that follows through the end thereof and 
    inserting ``under section 330.'';
        (2) in section 340C(a)(2) (42 U.S.C. 256c) by striking 
    ``under'' and all that follows through the end thereof and 
    inserting ``with assistance provided under section 330.''; and
        (3) by repealing subparts V and VI of part D of title III (42 
    U.S.C. 256 et seq.).
    (b) Social Security Act.--The Social Security Act is amended--
        (1) in clauses (i) and (ii)(I) of section 1861(aa)(4)(A) (42 
    U.S.C. 1395x(aa)(4)(A) (i) and (ii)(I)) by striking ``section 329, 
    330, or 340'' and inserting ``section 330 (other than subsection 
    (h))''; and
        (2) in clauses (i) and (ii)(II) of section 1905(l)(2)(B) (42 
    U.S.C. 1396d(l)(2)(B) (i) and (ii)(II)) by striking ``section 329, 
    330, 340, or 340A'' and inserting ``section 330''.
    (c) References.--Whenever any reference is made in any provision of 
law, regulation, rule, record, or document to a community health 
center, migrant health center, public housing health center, or 
homeless health center, such reference shall be considered a reference 
to a health center.
    (d) FTCA Clarification.--For purposes of section 224(k)(3) of the 
Public Health Service Act (42 U.S.C. 233(k)(3)), transfers from the 
fund described in such section for fiscal year 1996 shall be deemed to 
have occurred prior to December 31, 1995.
    (e) Additional Amendments.--After consultation with the appropriate 
committees of the Congress, the Secretary of Health and Human Services 
shall prepare and submit to the Congress a legislative proposal in the 
form of an implementing bill containing technical and conforming 
amendments to reflect the changes made by this Act.

SEC. 5. EFFECTIVE DATE.

    This Act and the amendments made by this Act shall become effective 
on October 1, 1997.

                               Speaker of the House of Representatives.

                            Vice President of the United States and    
                                               President of the Senate.