[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.