1.Short title; table of
contents
(a)This Act may be cited as the National Health Insurance
Act
.
(b)The table of contents of this Act is as follows:
Sec. 1. Short title; table of
contents.
Sec. 2. Findings and declaration of
purpose.
Sec. 3. Policies of Act.
TITLE I—BENEFITS AND ELIGIBILITY
Sec. 101. Classes of personal health
services.
Sec. 102. Availability of
benefits.
Sec. 103. How benefits obtained: free
choice by patient.
Sec. 104. Eligibility for
benefits.
Sec. 105. Provision of benefits for
noninsured needy and other individuals.
TITLE II—PARTICIPATION OF PHYSICIANS,
DENTISTS, NURSES, HOSPITALS, AND OTHERS
Sec. 201. Physicians and dentists;
specialists.
Sec. 202. Nurses.
Sec. 203. Hospitals.
Sec. 204. Auxiliary services.
Sec. 205. Agreements with individual
practitioners, hospitals, and others.
Sec. 206. Agreements with voluntary health
insurance and other organizations.
Sec. 207. Provisions common to all
agreements.
Sec. 208. Methods of payments for
services.
Sec. 209. Amount of payments for
services.
Sec. 210. Professional rights and
responsibilities.
TITLE III—LOCAL ADMINISTRATION
Sec. 301. Decentralization of
administration.
Sec. 302. Local administrative committee
or officer.
Sec. 303. Local area
committees.
Sec. 304. Local professional
committees.
Sec. 305. Methods of
administration.
TITLE IV—STATE ADMINISTRATION
Sec. 401. Declaration of
policy.
Sec. 402. State plan of
operations.
TITLE V—NATIONAL HEALTH INSURANCE BOARD;
NATIONAL ADVISORY MEDICAL POLICY COUNCIL; GENERAL ADMINISTRATIVE
PROVISIONS
Sec. 501. National Health Insurance
Board.
Sec. 502. Advisory Council.
Sec. 503. Studies, recommendations, and
reports.
Sec. 504. Nondisclosure of
information.
Sec. 505. Prohibition against
discrimination.
TITLE VI—ELIGIBILITY DETERMINATIONS,
COMPLAINTS, HEARINGS, AND JUDICIAL REVIEW
Sec. 601. Determinations as to eligibility
for benefits.
Sec. 602. Complaints of eligible
individuals and of persons furnishing benefits.
TITLE VII—APPLICATION OF ACT TO INDIVIDUALS
COVERED UNDER MEDICARE PROGRAM
Sec. 701. Eligibility; benefits
available.
Sec. 702. Study and report.
TITLE VIII—FISCAL PROVISIONS
Sec. 801. Use of Trust Fund.
Sec. 802. Allotment of funds.
Sec. 803. Grants-in-aid for training and
education.
TITLE IX—MISCELLANEOUS
PROVISIONS
Sec. 901. Definitions.
Sec. 902. Effective date.
TITLE X—VALUE ADDED TAX AND NATIONAL HEALTH
CARE TRUST FUND
Sec. 1001. Imposition of value added
tax.
Sec. 1002. Revenue from value added tax to
fund National Health Care Trust Fund.
TITLE XI—STUDY AND DEVELOPMENT OF COST
CONTROL MECHANISMS
Sec. 1101. Development of cost control
mechanisms.
2.Findings and
declaration of purpose
(a)The
Congress finds that—
(1)the health of the
Nation’s people is the foundation of our Nation’s strength, productivity, and
wealth;
(2)the assurance of
adequate medical care to all of our people is essential to the general welfare
and to the Nation’s security;
(3)since the
tremendous advances in medical science in recent years have necessarily meant
great advances in the cost of health services, our archaic system of paying for
medical care—based on public and private charity for the poor, on unpredictable
and often unbearable costs to the otherwise self-supporting, and on
disproportionate charges for the well-to-do—has resulted in the following
conditions:
(A)the inability of
the vast majority of our people to meet the shattering cost of serious or
chronic illness;
(B)the inability of
most of our people to benefit from modern preventive medicine; and
(C)wholly inadequate
provision for the health needs of our farm families and agricultural
workers;
(4)the conditions
described in the preceding paragraph cannot effectively be remedied under the
present system of payment for medical care, or under any voluntary insurance
system; and
(5)a
medical dole as an answer to this problem is repugnant to the American people
and would certainly result in a system of state medicine, paid for from tax
funds and rendered by regimented doctors.
(b)The
Congress declares the purposes of this Act to be to provide a sound economic
foundation for our free system of medicine and to correct the maldistribution
of health personnel and facilities by establishing a system of prepaid personal
health insurance on the principle of social insurance.
3.
(a)In establishing a system of national health insurance, it
is the policy of this Act that—
(1)those persons and
their dependents who are insured under the provisions of the Act shall be
assured full freedom to choose their physicians and to change their choice as
they may desire;
(2)physicians and
other professions furnishing services in accordance with the provisions of this
Act shall be assured full freedom in the practice of their professions,
including the right to accept or reject patients except as this right may be
restricted by their own professional ethics or by the laws of the several
States; and
(3)the administration
of this Act shall be based upon the American principle of
decentralization.
(b)Administrative
ResponsibilitiesIn carrying out these policies, it is the
intention of Congress that the major administrative responsibilities be placed
in the hands of local bodies representing both those who pay for and receive
services and those who render services, and operating within the framework of
plans made by the several States, and approved by the Federal agency; that the
National Health Care Trust Fund created by this Act shall be allotted equitably
among the several States and by the States to their local areas; that voluntary
as well as governmental organizations shall be recognized and utilized; and
that all eligible individuals and their dependents as specified in this Act
shall be entitled to its benefits without discrimination because of race,
color, or creed.
<enum>I</enum><header>BENEFITS AND
ELIGIBILITY</header>
<section id="H0F869549E9EE4DF3B80050F0144FCD26"><enum>101.</enum><header>Classes of
personal health services</header>
<subsection id="HF545297E791F49569D22BF15127B2598"><enum>(a)</enum><header>Personal Health
Services</header>
<paragraph id="H81DF1694C5EE4B0ABEB0994D9FDCCBA1"><enum>(1)</enum><header>In
general</header><text>The personal health services to be made available as
benefits to eligible individuals as provided in this title are the
following:</text>
<subparagraph id="HDADDD202B5B64B479858F3DEC68805C2"><enum>(A)</enum><text>Medical
services.</text>
</subparagraph><subparagraph id="HEC7A016FDF984B1E9291FE75A1908889"><enum>(B)</enum><text>Dental
services.</text>
</subparagraph><subparagraph id="HC8737EB3611343DBB1862E7C436B88C1"><enum>(C)</enum><text>Podiatric
services.</text>
</subparagraph><subparagraph id="HAA37F235A13A46A08CB19E8905BDF338"><enum>(D)</enum><text>Home-nursing
services.</text>
</subparagraph><subparagraph id="H533D729CD77C4A46B28EF88DEE5075CB"><enum>(E)</enum><text>Hospital
services.</text>
</subparagraph><subparagraph id="H3729CED6AF9040C181AF0663C9AD9737"><enum>(F)</enum><text>Auxiliary
services.</text>
</subparagraph></paragraph><paragraph id="H61B76D9526114B66009D308B18ABC863"><enum>(2)</enum><header>Provision of
services</header><text>Each class of services shall be provided by persons
(including individuals, partnerships, corporations, associations, consumer
cooperatives, and other organizations) who are authorized by applicable State
law, and who are qualified under title II, to do so.</text>
</paragraph></subsection><subsection id="H9FD0AE2100BC4D6C9600175817E03945"><enum>(b)</enum><header>Medical
Services</header><text>Medical services consist of—</text>
<paragraph id="H30FC2D7EBDEC4BFAA0E23D94D9FD3E00"><enum>(1)</enum><text>general medical
services such as can be rendered by a physician engaged in the general or
family practice of medicine, including preventive, diagnostic, and therapeutic
care and periodic medical examinations; and</text>
</paragraph><paragraph id="H0E474E3082F346D9BDEAFDA32D33EA68"><enum>(2)</enum><text>specialist
services rendered by a physician who is a specialist in the class of services
rendered, as defined in section 201.</text>
</paragraph><continuation-text continuation-text-level="subsection">Such
medical services may be rendered at the office, home, hospital, or elsewhere,
as necessary.</continuation-text></subsection><subsection id="H1B94602829C34C01B4799DD75C7ED7D6"><enum>(c)</enum><header>Dental
Services</header><text>Dental services consist of—</text>
<paragraph id="H4793AF84795C4982980404F1E9245738"><enum>(1)</enum><text>general dental
services rendered by a dentist engaged in the general practice of dentistry,
including preventive, diagnostic, and therapeutic care, and periodic dental
examinations; and</text>
</paragraph><paragraph id="H438BDD76616148BFBD7732E1DCA3F5BF"><enum>(2)</enum><text>specialist
services rendered by a dentist who is a specialist in the class of services
rendered, as defined in section 201.</text>
</paragraph><continuation-text continuation-text-level="subsection">Such dental
services may be rendered at the office, home, hospital, or elsewhere, as
necessary.</continuation-text></subsection><subsection id="H5BF2F65F7899420A8023C25F900FE79"><enum>(d)</enum><header>Podiatric
Services</header><text>Podiatric services consist of those professional
services of a podiatrist who is legally authorized to perform such services in
the State in which the podiatrist practices.</text>
</subsection><subsection id="H607D0255DE5C474C81AEE996A7BDE47"><enum>(e)</enum><header>Home-Nursing
Services</header><text>Home-nursing services consist of nursing care of the
sick rendered in the home by a registered professional nurse or a qualified
practical nurse.</text>
</subsection><subsection id="H81010EF1D6DA41398FCE6F3A1B7E233"><enum>(f)</enum><header>Hospital
Services</header>
<paragraph id="HE1F37166FF9E45EEAF987D3FECE4288"><enum>(1)</enum><header>In
general</header><text>Hospital services consist of hospitalization, including
necessary nursing services, and such physician, laboratory, ambulance, and
other services in connection with hospitalization as the National Health
Insurance Board (in this Act referred to as the <quote>Board</quote>), after
consultation with the National Advisory Medical Policy Council (in this Act
referred to as the <quote>Advisory Council</quote>), by regulation designates
as essential to good hospital care, for a maximum of 60 days in any benefit
year.</text>
</paragraph><paragraph id="H14496ECBA42446FF936B3EC39DDE599F"><enum>(2)</enum><header>Exclusion</header><text>Hospital
services shall not include hospitalization in a mental disease hospital or
institution, or hospitalization for any day more than 30 days following the
diagnosis of a psychosis.</text>
</paragraph><paragraph id="H534754E75BB2465988AEE87D7FB100CA"><enum>(3)</enum><header>Increase in
maximum number of days</header><text>Whenever the Board, after consultation
with the Advisory Council, finds that moneys in the National Health Care Trust
Fund are adequate and that facilities are available, it may by regulation
increase the maximum days of hospitalization in any benefit year.</text>
</paragraph></subsection><subsection id="H215D89FF4F584F7CB45D95893BBC66C"><enum>(g)</enum><header>Auxiliary
Services</header><text>Auxiliary services consist of such—</text>
<paragraph id="H700828F460CB4FD694D86D957572465"><enum>(1)</enum><text>chemical,
bacteriological, pathological, diagnostic X-ray and related laboratory
services;</text>
</paragraph><paragraph id="H482A90D485A444488C885C003C274B6E"><enum>(2)</enum><text>X-ray, radium, and
related therapy;</text>
</paragraph><paragraph id="HE1B65518BA484ED1B2EA2484EDD59E8"><enum>(3)</enum><text>physiotherapy;</text>
</paragraph><paragraph id="HBE0A951E70404F91B5FB4DB379CB3E00"><enum>(4)</enum><text>services of
optometrists;</text>
</paragraph><paragraph id="H37CC4254533A49B3A0F58E09D1C0B825"><enum>(5)</enum><text>prescribed drugs
which are unusually expensive;</text>
</paragraph><paragraph id="H4D5194EB5200486B8F98035B64D20047"><enum>(6)</enum><text>special
appliances; and</text>
</paragraph><paragraph id="HEEF12F87DA6140AD9731BC5D22B145EA"><enum>(7)</enum><text>eyeglasses;</text>
</paragraph><continuation-text continuation-text-level="subsection">as the
Board, after consultation with the Advisory Council, by regulation designates
as auxiliary services on the basis of its finding that their provision under
this Act is practicable and is essential to good health care.</continuation-text></subsection></section><section id="HE8726058C91E4D38B8B387F91430034E"><enum>102.</enum><header>Availability of
benefits</header>
<subsection id="H70C7DF4F09514CD48D088E10B4043DF2"><enum>(a)</enum><header>General
Availability</header>
<paragraph id="H013C2EF8936B4D52A27F3EE4077CB180"><enum>(1)</enum><header>In
general</header><text>Medical services, hospital services, and, except as
otherwise provided in subsection (b), all other personal health services
specified in section 101 shall be made available (subject to section 701) as
benefits to eligible individuals in all health-service areas within the United
States as rapidly and as completely as possible having regard for the
availability of the professional and technical personnel and the hospital and
other facilities needed to provide such services.</text>
</paragraph><paragraph id="H826F8C914C4C4864867D35E767D602CB"><enum>(2)</enum><header>Surveys of
resources and needs</header><text>To this end the resources and needs of each
State shall be surveyed and a program developed in each State to assure the
maximum participation and use of health personnel and facilities in the
provision of benefits, and to encourage improvement in the number and
distribution of such personnel and facilities throughout the State. Additional
surveys shall be undertaken as required, and the program in the State from time
to time modified on the basis thereof.</text>
</paragraph></subsection><subsection id="HED5CDEE7F4FE4663B6612091CA633EA4"><enum>(b)</enum><header>Limitation on
Availability</header><text>If the Board, after consultation with the Advisory
Council, finds that the personnel or facilities or funds that are or can be
made available are inadequate to insure the provision of all services included
as dental, home-nursing, or auxiliary services under section 101, it may by
regulation limit for a specified period the services which may be provided as
benefits, or modify the extent to which, or the circumstances under which, they
will be provided to eligible individuals. Any such restriction or limitation
shall be reduced or withdrawn as rapidly as may be practicable. In the case of
dental services, priority in the reduction or withdrawal of any such
restriction or limitation shall be given to children.</text>
</subsection><subsection id="HCD04C6EBD262427F849C15630020C3BE"><enum>(c)</enum><header>Recommendations</header><text>The
Board shall have the duty of—</text>
<paragraph id="H7A4036B4B1604A8691CD7D902200BF07"><enum>(1)</enum><text>studying and
making recommendations as to needed services and facilities for the care of the
chronic sick afflicted with physical ailments, and for the care of individuals
afflicted with mental or nervous diseases, and as to needed provisions for the
prevention of chronic physical diseases and of mental or nervous diseases;
and</text>
</paragraph><paragraph id="H68837C53CD9A4ADDA97627A7003C73DD"><enum>(2)</enum><text>making reports
from time to time, with recommendations as to legislation, but the first such
report shall be made not later than two years after benefits under this Act
first become available.</text>
</paragraph></subsection></section><section id="H30C822EF38CE4A5E992C6EA27EDA17BB"><enum>103.</enum><header>How benefits
obtained: free choice by patient</header>
<subsection id="H1F41CF047EEE4EF594B78B639BB7D5FD"><enum>(a)</enum><header>In
General</header><text>Every individual eligible for personal health services
available under this Act may freely select the physician, dentist, podiatrist,
nurse, medical group, hospital, or other person of the individual’s choice to
render such services, and may change such selection if the practitioner,
medical group, hospital, or other person has agreed under title II to furnish
the class of services required and consents to furnish such services to the
individual.</text>
</subsection><subsection id="HE5ACB61FE6824D940087D73660227B65"><enum>(b)</enum><header>Practitioner
Services</header><text>General medical, dental, and podiatric services may be
obtained by request made by the individual directly to the practitioner of the
individual’s choice.</text>
</subsection><subsection id="H5E27B303491742538E0080870000188F"><enum>(c)</enum><header>Specialty
Services</header><text>Specialist, home-nursing, hospital, and auxiliary
services shall be obtained from the specialist, nurse, hospital, or other
person of the individual’s choice, whenever the practitioner from whom the
individual is receiving medical or dental services as benefits under this Act
refers the individual for specialist, home-nursing, hospital, or auxiliary
services upon determining that such services are required in the proper care of
the individual’s particular case; or whenever, upon request of the individual,
an administrative medical officer, upon a like determination, refers the
individual for such services.</text>
</subsection><subsection id="H1D4C0251ED9C421882A51E889BC844B0"><enum>(d)</enum><header>Waiver of
Referral</header><text>The Board, by regulation, shall dispense with the
necessity of referral in cases of emergency, and may dispense with the
necessity of referral under specified circumstances or as respects specified
classes of services, or both, if it finds, after consultation with the Advisory
Council, that such action will be conducive to the provision of a more adequate
amount and quality of health care and will not unreasonably increase the
expenditures from the National Health Care Trust Fund for such services.</text>
</subsection></section><section id="H7CF437C394AF40D78CA400C6F3036077"><enum>104.</enum><header>Eligibility for
benefits</header>
<subsection id="H3FCFB7695D4F490896A9809DBBDE1BE2"><enum>(a)</enum><header>In
General</header><text>Subject to section 701, every individual shall be
eligible for benefits under this Act throughout any benefit year if the
individual—</text>
<paragraph id="H65F7692EE4024279A54445104458C3A5"><enum>(1)</enum><text>has received (or,
in the case of income from self-employment, has accrued)—</text>
<subparagraph id="H601E2244F16A45E9A48716B6B498D127"><enum>(A)</enum><text>not less than
$2,000 in wages during the first four of the last six calendar quarters
preceding the beginning of the benefit year; or</text>
</subparagraph><subparagraph id="H2030FEF219E74D5DB0C375B7E300DE79"><enum>(B)</enum><text>not less than
$1,500 in wages in each of six calendar quarters during the first twelve of the
last fourteen calendar quarters preceding the beginning of the benefit year
(not counting as one of such fourteen calendar quarters any quarter in any part
of which the individual was under a total disability which continued for six
months or more);</text>
</subparagraph></paragraph><paragraph id="HAB0A1E43B22E417AA27002F600EEA04B"><enum>(2)</enum><text>is entitled, for
the first month in the benefit year, to a benefit under title II of the
<act-name parsable-cite="SSA">Social Security Act</act-name> or to an annuity
under subchapter III (relating to civil service retirement) of chapter 83 of
title 5, United States Code; or</text>
</paragraph><paragraph id="HE44C17139258423796CF9D38073ED9AE"><enum>(3)</enum><text>the individual is
on the first day of the benefit year a dependent of an individual who is
eligible under paragraph (1) or paragraph (2).</text>
</paragraph></subsection><subsection id="HE59390B802854F9C00D5436100A476FC"><enum>(b)</enum><header>Additional
Eligibility</header><text>Subject to section 701, every individual, not
eligible therefor under subsection (a), shall be eligible for benefits under
this Act during the remainder of a benefit year, beginning with—</text>
<paragraph id="H11DD6BE4A8624027B080AF4991093C35"><enum>(1)</enum><text>the first day of
any calendar quarter in such benefit year, if the individual has received (or,
in the case of income from self-employment, has accrued) not less than $150 in
wages during the first four of the last six calendar quarters preceding the
beginning of such calendar quarter;</text>
</paragraph><paragraph id="H1BA1553C87564F6DB9DDBF9EAD092AB"><enum>(2)</enum><text>the first day of
the first month in such benefit year for which the individual is entitled to a
benefit or annuity referred to in subsection (a)(2); or</text>
</paragraph><paragraph id="HE946C6E66FAF421098DD773711D2B697"><enum>(3)</enum><text>the first day in
such benefit year on which the is or becomes a dependent of an individual who
is eligible for benefits under subsection (a) (1) or (2) under paragraph (1) or
(2).</text>
</paragraph></subsection><subsection id="H17BA476F185641ABB2BABF56588F1DC"><enum>(c)</enum><header>Coverage Under
Workers’ Compensation</header>
<paragraph id="HBC2859C75C2548EB91D3EC187F4EE700"><enum>(1)</enum><header>No
coverage</header><text>No individual shall be deemed eligible for any personal
health services as a benefit under this Act which are required by reason of any
injury, disease, or disability on account of which any medical, dental,
home-nursing, hospital, or auxiliary service is being received, or upon
application therefor would be received, under a workmen’s compensation law of
the United States or of any State, unless equitable reimbursements to the
National Health Care Trust Fund for the provision of such services as benefits
have been made or assured under section 105.</text>
</paragraph><paragraph id="HBDE64949470E4AEDA92540E9CD91D58"><enum>(2)</enum><header>Subrogation</header><text>In
any case in which an individual receives any personal health service as a
benefit under this Act with respect to any such injury, disease, or disability,
for which no reimbursement to the National Health Care Trust Fund has been made
or assured, the United States shall to the extent permitted by State law be
subrogated to all rights of such individual, or of the person who furnished
such service, to be paid or reimbursed, pursuant to such workmen’s compensation
law, for the cost of furnishing such service.</text>
</paragraph></subsection></section><section id="HBFEC2927AB4245A3A7538696E710E1EC"><enum>105.</enum><header>Provision of
benefits for noninsured needy and other individuals</header>
<subsection id="HE65D2BA45EF64EAD9479090907453B41"><enum>(a)</enum><header>In
General</header><text>Subject to section 701, any or all benefits provided
under this Act to individuals eligible for such benefits may be furnished to
individuals (including the needy) not otherwise eligible therefor, for any
period for which equitable reimbursements to the National Health Care Trust
Fund on behalf of such needy or other individuals have been made, or for which
reasonable assurance of such reimbursements have been given, by public agencies
of the United States, the several States, or any of them or of their political
subdivisions, such reimbursements to be in accordance with agreements and
working arrangements negotiated with such public agencies. Services furnished
to such needy or other individuals as benefits shall be of the same quality, be
furnished by the same methods, and be paid for through the same arrangements,
as services furnished to individuals eligible for benefits under this
Act.</text>
</subsection><subsection id="H8728DE4BBBDC4EA4AF72EC221CA4CADF"><enum>(b)</enum><header>Availability of
Federal Funds</header><text>Federal grants to States under title XIX, and part
A of title IV, of the <act-name parsable-cite="SSA">Social Security
Act</act-name>, and Federal grants to States for aid or assistance under other
provisions of such Act, shall be available to the States for provision of
personal-health services for noninsured needy individuals in accordance with
the provisions of subsection (a).</text>
</subsection></section><enum>II</enum><header>PARTICIPATION OF
PHYSICIANS, DENTISTS, NURSES, HOSPITALS, AND OTHERS</header>
<section id="HE47B17EFF63B41FC80EFC2EF33A6FD1E"><enum>201.</enum><header>Physicians and
dentists; specialists</header>
<subsection id="H92AD8914AC35485C8BDF62CE2C73A641"><enum>(a)</enum><header>Qualifications</header><text>Any
individual who is a physician, dentist, or podiatrist legally authorized in a
State to render any services included as general medical, dental, or podiatric
services shall be deemed qualified to render such services in that State as
benefits under this Act.</text>
</subsection><subsection id="H3169E44D5A0C47D1B94926975D8631E4"><enum>(b)</enum><header>Specialists</header>
<paragraph id="H9D7515A76AAA407894F562A1266F91D4"><enum>(1)</enum><header>In
general</header><text>Any such individual who is found to possess skill and
experience of a degree and kind sufficient to meet standards established for a
class of specialist services shall be deemed qualified to receive compensation
for specialist services of such class as benefits under this Act.</text>
</paragraph><paragraph id="HCB7F7218EE0847519CB81F6EFD73D7E6"><enum>(2)</enum><header>Standards</header><text>The
Board, after consultation with the Advisory Council, shall establish standards
as to the special skills and experience required to qualify an individual to
render each such class of specialist services as benefits under this Act, and
to receive compensation for such specialist services. In establishing such
standards and in determining whether individuals qualify thereunder, standards
and certifications developed by professional agencies shall be utilized as far
as is consistent with the purposes of this Act, and regard shall be had for the
varying needs and the available resources in professional personnel of the
States and of local health-service areas.</text>
</paragraph></subsection></section><section id="HB358CE935F904F45A65DECD032E45BAF"><enum>202.</enum><header>Nurses</header><text display-inline="no-display-inline">Any individual shall be deemed qualified to
render home-nursing services in a State as benefits under this title if such
individual is—</text>
<paragraph id="H20F16D0D117347B800B62BEC30E8352"><enum>(1)</enum><text>a
professional nurse registered in such State; or</text>
</paragraph><paragraph id="HBCD1B07ABDAA40BCB23400A92B76A38B"><enum>(2)</enum><text>a
practical nurse—</text>
<subparagraph id="H744D0FB1AD43479584843632C3A1C75"><enum>(A)</enum><text>who is qualified as
such under State standards or requirements, or, in the absence of State
standards or requirements, is found to be qualified under standards established
by the Board after consultation with the Advisory Council and with nursing
agencies; and</text>
</subparagraph><subparagraph id="H538454D1AA1749F2AB01771BD2FA465E"><enum>(B)</enum><text>who furnishes
nursing care under the direction or supervision of the State health agency, the
health agency of a political subdivision of the State, or an organization
supplying and supervising the services of registered professional nurses in the
State.</text>
</subparagraph></paragraph></section><section id="HB1A8DDC56E784FB19E99C3062C8C6EF7"><enum>203.</enum><header>Hospitals</header><text display-inline="no-display-inline">Any hospital or other institution shall be
deemed qualified to furnish all or particular classes of hospital services as
benefits under this Act if—</text>
<paragraph id="HF129454099ED49E0BF28795C54DF799D"><enum>(1)</enum><text>it is qualified to
furnish such services under State standards or requirements for the maintenance
and operation of hospitals which apply to the class or classes of services to
be furnished; or</text>
</paragraph><paragraph id="H05A06677AEAC4A7DB24EAE097B77929"><enum>(2)</enum><text>in
the absence of such State standards or requirements, it is found to afford
professional services, personnel, and equipment adequate to promote the health
and safety of individuals requiring the class or classes of hospital services
to be furnished, according to standards which the Board shall establish after
consultation with the Advisory Council.</text>
</paragraph></section><section id="HC0C02208B7FE4714B5EE6827448B6F34"><enum>204.</enum><header>Auxiliary
services</header><text display-inline="no-display-inline">Any person (as
defined in section 901(1)) who—</text>
<paragraph id="HDF631B3945004745A0F65D63F0966373"><enum>(1)</enum><text>is qualified under
State standards or requirements to furnish a class of services included as
auxiliary services; or</text>
</paragraph><paragraph id="H7846CAF64E664EC4A941AA954935EBF8"><enum>(2)</enum><text>in the absence of
State standards or requirements, is found to be qualified to furnish a class of
such services under standards established for such class by the Board after
consultation with the Advisory Council,</text>
</paragraph></section><appropriations-major id="LEXA-Repairid5C2BBE6EA64147E795B527F4C1A0D080"><subsection id="LEXA-RepairidCA603FD603CB4DDC8AD6A56B9B79C647"><enum></enum><continuation-text continuation-text-level="subsection">shall be
deemed qualified to furnish such class of auxiliary services in that State as
benefits under this Act.</continuation-text></subsection></appropriations-major><section id="H1A586DF5DE6D4D6E82F33F6951C67127"><enum>205.</enum><header>Agreements with
individual practitioners, hospitals, and others</header><text display-inline="no-display-inline">Any individual (or, in the case of hospital
or auxiliary services, any person) qualified under this title to furnish any
class or classes of personal health services as benefits may enter into an
agreement with the State agency which in accordance with title IV has assumed
responsibility for the administration in the State of benefits under this Act
(in this Act referred to as the <quote>State agency</quote>), to furnish such
class or classes of services as benefits to individuals eligible therefor under
this Act.</text>
</section><section id="H771DC5939E6847438069FC03F78FE1D2"><enum>206.</enum><header>Agreements with
voluntary health insurance and other organizations</header>
<subsection id="H07AC8D01C905426298736E191E1DDDBD"><enum>(a)</enum><header>In
General</header><text>In the provision of personal health services, it shall be
the policy to utilize individuals or organizations qualified under this title
to render such services, including—</text>
<paragraph id="H65F247E1928B41CBAB6ECE4400CFB293"><enum>(1)</enum><text>any organized
group of individuals;</text>
</paragraph><paragraph id="HB738AEDBD4634936A11687747D00089B"><enum>(2)</enum><text>any partnership,
association, or consumer cooperative;</text>
</paragraph><paragraph id="H548791F8722543DE8B1232E6F90031AD"><enum>(3)</enum><text>any hospital or
any hospital and its staff; or</text>
</paragraph><paragraph id="H13C9DCE24A744B7593B6188D684D7AF"><enum>(4)</enum><text>any organization
operating a voluntary health-service insurance plan or other voluntary
health-service plan.</text>
</paragraph></subsection><subsection id="HB6A5899D2B5B456BAD704EB6CA009E46"><enum>(b)</enum><header>Authorization</header><text>The
State agency is authorized to enter into an agreement with any organization
referred to in subsection (a) for the provision of personal health services
under this Act. Any such organization, whether or not it enters into an
agreement with the State agency on its own behalf, shall be permitted to act as
agent for individuals or other persons in negotiating or in carrying out
agreements with the State agency for rendering personal health services under
this Act.</text>
</subsection><subsection id="H0C440DA438174C72B06055B7B480D700"><enum>(c)</enum><header>Qualification of
Providers</header><text>Any agreement under this section shall provide that
each class of personal health services will be furnished only by individuals
(or, in the case of hospital or auxiliary benefits, by persons, as defined in
section 901(1)) who are qualified under this title to render such class of
services and each of whom has agreed or has authorized an agreement to be made
on the individual’s behalf with the State agency that the individual will
furnish such services in accordance with this Act and with regulations
prescribed thereunder. Each such individual or person shall be responsible,
both to the State agency and (in accordance with applicable State law) to
individuals eligible for personal health services as benefits, for carrying out
such agreement made by the individual or person or on behalf of the individual
or person.</text>
</subsection></section><section id="H1BF231C75A1F42DDBE8C61D57D456B7B"><enum>207.</enum><header>Provisions
common to all agreements</header>
<subsection id="H5003986F54EF4623A63FB52C757CA1D0"><enum>(a)</enum><header>In
General</header><text>Each agreement made under this title shall—</text>
<paragraph id="HABFFEA702EFC4854A56B3DBDDEBFCE0"><enum>(1)</enum><text>specify the class
or classes of services to be furnished or provided pursuant to its
terms;</text>
</paragraph><paragraph id="HE3D0A300B4164E25A2BC102D50665503"><enum>(2)</enum><text>contain an
undertaking to comply with this Act and with regulations prescribed
thereunder;</text>
</paragraph><paragraph id="H4C945F28FC57447E8D2820645173008D"><enum>(3)</enum><text>be made upon terms
and conditions consistent with the efficient and economical administration of
this Act; and</text>
</paragraph><paragraph id="H21B273F01B474C6BB8ABE9082BFD3DB"><enum>(4)</enum><text>continue in force
for such period and be terminable upon such notice as may be agreed
upon.</text>
</paragraph></subsection><subsection id="HEABCFF408122431190F1583C544E5BDA"><enum>(b)</enum><header>Term</header><text>No
agreement under section 206, and no designation of an agent, shall for more
than one year preclude any individual or person qualified to furnish personal
health services from exercising such rights as the individual or person would
otherwise have under this title—</text>
<paragraph id="HCE2BD22DAF2B432E933300D604C5CFA"><enum>(1)</enum><text>to
negotiate and enter into an agreement directly with the State agency;</text>
</paragraph><paragraph id="HBD4E0E1DFBF447EB00EE3E82E967B645"><enum>(2)</enum><text>to designate
another agent for such negotiation; or</text>
</paragraph><paragraph id="H3E43C49D4AC84493B7F1111202D119CB"><enum>(3)</enum><text>to participate in
another agreement under section 206.</text>
</paragraph></subsection><subsection id="H94AEC78580544135AFED01DDD6BF21BB"><enum>(c)</enum><header>Non Exclusive
Agreements</header><text>No agreement made under this title shall confer upon
any individual or other person, or any group or other organization, the right
of furnishing or providing personal health services as benefits, to the
exclusion in whole or in part of other individuals, persons, groups, or
organizations qualified to furnish or provide such services.</text>
</subsection><subsection id="H1538C42222B74D57AF63415D89B16FA0"><enum>(d)</enum><header>Disqualification</header>
<paragraph id="HE610CC50CD654F16AEE4FA633A43136"><enum>(1)</enum><header>In
general</header><text>If the State agency after investigation finds that an
individual or other person under agreement to furnish or provide personal
health services as benefits is no longer qualified to furnish or provide such
services, or has committed a substantial breach of the agreement, it shall
notify such person of its findings, together with the reasons therefor, and in
the absence of a request for a hearing by such person under title VI, or in the
event of a final decision sustaining its findings after any hearing and further
review provided under title VI, may terminate the agreement and withdraw the
person’s name from the list published pursuant to title III.</text>
</paragraph><paragraph id="H396A575B751E483CAEDBCDF3B5811866"><enum>(2)</enum><header>Limitation on
subsequent agreements</header><text>After an agreement has been so terminated,
no new agreement shall be entered into with such person under this Act unless
and until such person gives reasonable assurances to the State agency of the
person’s ability and willingness to discharge all obligations and
responsibilities under a new agreement satisfactorily in accordance with its
provisions.</text>
</paragraph></subsection></section><section id="HD106523DD0964CD6B3ED8EF6636C7947"><enum>208.</enum><header>Methods of
payments for services</header>
<subsection id="H2B53F6FC596946D59D45BB6F28AEAD22"><enum>(a)</enum><header>Professional
Services</header><text>Agreements for the furnishing of medical, dental, or
podiatric services (other than specialist services) as benefits under this Act
shall provide for payment—</text>
<paragraph id="HEEDF98F50A644C14A12B276FF0F155BF"><enum>(1)</enum><text>on the basis of
fees for services rendered as benefits, according to a fee schedule;</text>
</paragraph><paragraph id="H771E4291969D425E95E08B55FD594749"><enum>(2)</enum><text>on a per capita
basis, the amount being according to the number of individuals eligible for
benefits who are on the practitioner’s list;</text>
</paragraph><paragraph id="H976F9AC25F204591896C66AE7F8B4054"><enum>(3)</enum><text>on a salary basis,
whole time or part time; or</text>
</paragraph><paragraph id="H6E64F0BAE0274E1D83818B2E97EA054C"><enum>(4)</enum><text>on such
combinations or modifications of these bases, including separate provision for
travel and related expenses, as may be approved by the State agency;</text>
</paragraph><continuation-text continuation-text-level="subsection">according
in each health-service area as the majority of the medical practitioners or of
the dental practitioners, respectively, under agreement to furnish such
services shall elect. Provision shall be made for another method or methods of
payment (from among the methods listed in this subsection) to those medical
practitioners or to those dental practitioners who do not elect the method of
such majority, when it is found that such alternative method of making payments
contributes to carrying out the provisions of section 305 or otherwise promotes
the efficient and economical provision of medical or dental services in the
area.</continuation-text></subsection><subsection id="H246602BCFF8342BBA11D3CC5BFEF279"><enum>(b)</enum><header>Specialist
Services</header><text>Agreements for the furnishing of specialist services as
benefits under this Act may provide for payments on the basis of fee for
service, per case, per session, per capita, on salary (whole time or part
time), or other basis, or combination thereof.</text>
</subsection><subsection id="H8DC11E4FB666457A0094A83EF125579"><enum>(c)</enum><header>Treatment of
Groups</header><text>Any of the methods of making payments from among the
methods listed in subsection (a) or subsection (b) may be used in making
payments to groups or practitioners or organizations or other agencies which
undertake to provide specialist services as well as general medical or general
dental services.</text>
</subsection><subsection id="HFE55AAA14E034F5B99F9CE4972B1962"><enum>(d)</enum><header>Hospital
Services</header>
<paragraph id="H62FB64529AC84A2181A6532C886391EF"><enum>(1)</enum><header>Use of
reasonable costs</header><text>Agreements for the furnishing of hospital
services as benefits under this Act shall provide for payment on the basis of
the reasonable costs of hospitalization furnished as benefits.</text>
</paragraph><paragraph id="H58AB5D2C601F4F488E61F7F32BAB8667"><enum>(2)</enum><header>Maximum
rates</header><text>The Board, after consultation with the Advisory Council and
with representatives of interested hospital organizations, may by regulation
prescribe maximum rates for hospitalization furnished as benefits under this
Act, and such maximum rates may be varied according to classes of localities or
types of service.</text>
</paragraph><paragraph id="H331CA93A54384ECC90F97C80DC22145E"><enum>(3)</enum><header>Payment
basis</header><text>Payments to hospitals shall be based on the least expensive
multiple-bed accommodations available in the hospital unless the patient’s
condition makes the use of private accommodations essential for the patient’s
proper medical care.</text>
</paragraph><paragraph id="HC7D6C374ACDD4C3EA0B59CA6B368CB"><enum>(4)</enum><header>Additional
charges</header><text>An agreement made for furnishing such services shall not
affect the right of the hospital or other person with whom the agreement is
made to require payments from patients with respect to the additional cost of
more expensive facilities occupied at the request of the patient, or with
respect to services not included as benefits under this Act.</text>
</paragraph></subsection><subsection id="H6C43482D63084BBBB706D5857D42141F"><enum>(e)</enum><header>Home-Nursing
Services and Auxiliary Services</header><text>Agreements for the furnishing of
home-nursing services or auxiliary services as benefits under this Act shall
provide for payment in accordance with such methods as the State agency may
approve from among those set forth in regulations prescribed pursuant to this
Act.</text>
</subsection><subsection id="H9168AF7E744947D1AF00046C991FBA54"><enum>(f)</enum><header>Pro-Rating
Certain Per Capita Payments</header><text>In any health-service area where
agreements for the furnishing of general medical or general dental services
provide for payment only on a per capita basis, the per capita payments with
respect to those individuals residing in the area who have failed to select a
practitioner or other person to furnish such services to them shall be made on
a pro rata basis among the practitioners and other persons under agreement to
furnish such services in the area.</text>
</subsection></section><section id="H27AF4FEDB7884EC0BBE1F8450136FAB"><enum>209.</enum><header>Amount of
payments for services</header>
<subsection id="HB073F917E4CA4F0581B40200003F9392"><enum>(a)</enum><header>Consideration of
Local Conditions</header>
<paragraph id="H090B338AA5704A0F92B622D3E538C00"><enum>(1)</enum><header>In
general</header><text>Rates or amounts of payment for particular services or
classes of services furnished as benefits under this Act shall be adapted to
take account of relevant regional, State, or local conditions and
practices.</text>
</paragraph><paragraph id="HF1375F365AFC4384BD3B3E158246DFAF"><enum>(2)</enum><header>Professional
services</header><text>In arriving at the payments to be made for services of
general medical and dental practitioners, specialists, professional and
practical nurses, or other practitioners, regard shall be had for the annual
income or its equivalent which the payments will provide, and consideration
shall be given to degree of specialization, and to the skill, experience, and
responsibility involved in rendering the services.</text>
</paragraph><paragraph id="HF7E97B3FD1264F608DF5710951C1DEE7"><enum>(3)</enum><header>Adequacy</header><text>Such
payments, together with the other terms and conditions of the agreements made
under this title, shall be adequate to provide professional and financial
incentives to practitioners to advance in their professions and to practice in
localities where their services are most needed, to encourage high standards in
the quality of services furnished, to give assistance in their use of
opportunities for postgraduate study, and to allow for adequate
vacation.</text>
</paragraph></subsection><subsection id="HA230DC0169FE4EF698D064B19C87B166"><enum>(b)</enum><header>Equivalence in
Choice of Payment Methods</header><text>The rates and amounts of payments fixed
under the different methods of payments specified in subsections (a), (b), (c),
and (e) of section 208, and the methods of making payments, shall assure
reasonably equivalent awards for practitioners selecting different methods of
payment, in consideration of the value of the services they render.</text>
</subsection><subsection id="H301C0899607D45E191DC018FF3E254C"><enum>(c)</enum><header>Limitations on
Maximum Number of Patients</header><text>Maximum limits upon the number of
eligible individuals with respect to whom any person may undertake to render
services in any local health-service area may be fixed by the local
administrative committee or local administrative officer of that health-service
area only on the basis of a recommendation of the professional committee in
that area that such limitation is necessary to maintain high standards in the
quality of medical, dental, or other services furnished as benefits. Any such
limits shall take account of professional needs and practices and shall provide
suitable exceptions for emergency and temporary situations.</text>
</subsection><subsection id="H679C9D8F0A3E4C989B5179766D3FCA40"><enum>(d)</enum><header>Treatment of
Groups</header><text>The making of an agreement under section 206 with a group
or other organization shall not operate to increase the payments to be made
pursuant to any such agreement over the amounts which, in the absence of such
group or organization would be payable for the same services pursuant to
agreements made under section 205 directly with the person or persons who
furnish the services.</text>
</subsection></section><section id="H0741582DACD74DF5A4813330DD9E701F"><enum>210.</enum><header>Professional
rights and responsibilities</header>
<subsection id="H1DDAB431BF9E424BAAFB6D2CF091B98D"><enum>(a)</enum><header>Termination
Arrangements</header><text>Any person who enters into an agreement under this
title may terminate such agreement after reasonable notice and after suitable
arrangements are made to fulfill professional obligations to eligible
individuals.</text>
</subsection><subsection id="H40D12CB2809A4C738B5C4B7BBD447195"><enum>(b)</enum><header>Freedom of
Practice</header><text>Every physician, dentist, or nurse agreeing to render
services as benefits under this Act shall be free to practice such
professional’s profession in the locality of the professional’s own choosing,
consistent with the requirements of the laws of the States.</text>
</subsection><subsection id="HDCEA86E7D9FF464A9FEF7F56BF8E0075"><enum>(c)</enum><header>Freedom in
Acceptance of Patients</header><text>Every physician, dentist, nurse, hospital,
or other person entering into an agreement under this title shall be free to
the extent consistent with applicable State law and customary professional
ethics to accept or reject as a patient any individual requesting the
professional’s services.</text>
</subsection><subsection id="HF3718A416B254BF5A2DE1F957421BE2B"><enum>(d)</enum><header>Freedom From
Supervision or Control</header><text>No supervision or control over the details
of administration or operation, or over the selection, tenure, or compensation
of personnel, shall be exercised under the authority of this Act over any
hospital which has agreed to furnish personal health services as
benefits.</text>
</subsection></section><enum>III</enum><header>LOCAL
ADMINISTRATION</header>
<section id="HA21DDB347D8E4F2FB78816B30080ECE7"><enum>301.</enum><header>Decentralization
of administration</header>
<subsection id="HEF7F419F85F84DAD9DC5D10CDA9F49B"><enum>(a)</enum><header>In
General</header><text>In order that personal health-service benefits may be
made available promptly and in a manner best adapted to local practices,
conditions, and needs, responsibility for administration of the benefits
provided under this Act in the several local health-service areas shall be
decentralized as fully as practicable to local administrative committees or
local administrative officers, acting with the advice and assistance, as
provided in this title, of local professional committees and, in the case of
local administrative officers, the advice and assistance of local area
committees.</text>
</subsection><subsection id="H75EBA121F1CB4FCC9164145791798959"><enum>(b)</enum><header>Designation of
Health-Service Areas</header><text>The health-service areas of a State shall be
those so designated in the State plan of operations.</text>
</subsection></section><section id="HB5532F3F87844716A089F680EED6C89C"><enum>302.</enum><header>Local
administrative committee or officer</header>
<subsection id="HA353D3BAFBDA44F499BABC9484ABD516"><enum>(a)</enum><header>In
General</header><text>The local administrative agency for each local
health-service area may, as determined by the State, be either—</text>
<paragraph id="H746D7AE7540C4D83A999D435672A6BB"><enum>(1)</enum><text>a
local administrative committee established in accordance with section 303,
which shall act through a local executive officer; or</text>
</paragraph><paragraph id="H7A6540CF7896482980CC3B77BAF3054D"><enum>(2)</enum><text>a
local administrative officer, who shall act with the advice and assistance of a
local advisory committee established in accordance with section 303.</text>
</paragraph></subsection><subsection id="H3BD4575D912E4AA1BF8F27627ED3F808"><enum>(b)</enum><header>Arrangements for
Services</header><text>The local administrative committee or officer, with the
advice and assistance of such local professional committees as may from time to
time be established, shall arrange for the furnishing of personal
health-service benefits to eligible individuals in the area and to that end
shall—</text>
<paragraph id="H0E6F20CB90FF4438AA1EC1D9CE15F4B4"><enum>(1)</enum><text>publish, and make
readily available to eligible individuals in the area, lists of the names of
all persons who have agreed to furnish personal health services in the area,
together with the class or classes of services which each has undertaken to
furnish;</text>
</paragraph><paragraph id="HC35C91CAA3D64F978079EB74BFA1A300"><enum>(2)</enum><text>disseminate
pertinent information concerning the rights and privileges under this Act of
eligible individuals and of persons qualified to furnish personal health
services as benefits;</text>
</paragraph><paragraph id="H66531DBC08F24F2FB90010680076F04B"><enum>(3)</enum><text>maintain effective
relationships with physicians, dentists, nurses, hospitals, and other persons
who have entered into agreements to furnish personal health services in the
area, in order to facilitate the furnishing of such services in accordance with
such agreements, to assure full and prompt payment to such persons for services
so furnished, and to enlist their full cooperation in the administration of
benefits under this Act in the area;</text>
</paragraph><paragraph id="H1254D2F1BD774DE7B440D54E00B2E4A8"><enum>(4)</enum><text>receive and, to
the extent possible in the local area, adjust any complaints which may be made
concerning the administration of benefits under this Act in the area;</text>
</paragraph><paragraph id="H37128ADC719D4658BAAE004C138B5F2B"><enum>(5)</enum><text>perform such other
duties (including the making of payments to persons furnishing personal health
services in the area) as may be assigned by the State agency; and</text>
</paragraph><paragraph id="HEC8CC9C515B74BDD84868584F5099148"><enum>(6)</enum><text>take or initiate
such other administrative action as the committee or officer finds will best
carry out, within the area, the provisions of this Act, and best effectuate its
purposes.</text>
</paragraph></subsection></section><section id="H9CD3BDDFB40D4991AC5332BA6B711BE2"><enum>303.</enum><header>Local area
committees</header>
<subsection id="H054056AB77AF4ECFADF7E59DA2797F97"><enum>(a)</enum><header>Establishment</header>
<paragraph id="HA5516EDD32154461AE009865D0551DED"><enum>(1)</enum><header>In
general</header><text>A local area committee shall be established in each
health-service area.</text>
</paragraph><paragraph id="H5AA328D3D7174F159B722EB3B3A543A8"><enum>(2)</enum><header>Functions</header><text>If
designated by the State as a local administrative committee, the local area
committee shall perform the functions specified in section 302 and shall
formulate policies for the administration of benefits under this Act in the
area. If designated as an advisory committee, it shall advise and assist in the
performance of such functions and the formulation of such policies. The
committee, whether administrative or advisory, shall—</text>
<subparagraph id="H101DC37A383C4AB0BC9E4CDA609E972B"><enum>(A)</enum><text>participate in the
solution of problems affecting the administration of such benefits;</text>
</subparagraph><subparagraph id="HD701997C1CE144F9828BC6733D813CE9"><enum>(B)</enum><text>promote
impartiality and freedom from political influence in such
administration;</text>
</subparagraph><subparagraph id="H88686B38B3CD41FDBE4CB4D100CAD911"><enum>(C)</enum><text>perform related
functions to the end that administration in the area may be responsive to the
wishes and needs of persons furnishing and receiving benefits in the area, be
adapted to local practices and resources; and</text>
</subparagraph><subparagraph id="H6D6E703A487B4A0EA2E0019F2BBCCA"><enum>(D)</enum><text>provide adequate and
high quality personal health services to all eligible individuals.</text>
</subparagraph></paragraph></subsection><subsection id="H111944D0C70C4899AEF6B300EAB6AFDD"><enum>(b)</enum><header>Composition</header><text>Each
local area committee shall consist of not less than 8 nor more than 16 members.
The members shall be so selected that—</text>
<paragraph id="HB5594D50D3C844E18CB293318EEE2D5F"><enum>(1)</enum><text>a
majority of the committee shall be representative of the interests of
individuals in the area who are eligible for benefits; and</text>
</paragraph><paragraph id="H72911CCFEAB64CC9BAFE48E0B9BFA2F6"><enum>(2)</enum><text>the remaining
members shall be chosen from the several professions, hospitals, and other
organizations in the area by whom such benefits will be provided.</text>
</paragraph></subsection><subsection id="HD044A1666BCE4ABE9FBEDED7E34B2858"><enum>(c)</enum><header>Meetings</header>
<paragraph id="H5B6A3FFFFA1C4BA58F4F9933124F00F3"><enum>(1)</enum><header>In
general</header><text>The local area committee shall meet—</text>
<subparagraph id="H1631222B68254DD6B34EC296DD764220"><enum>(A)</enum><text>as often as may be
necessary, and whenever one-third or more of the members request a meeting;
and</text>
</subparagraph><subparagraph id="H090F79C594FD4B279CD25EDDA28548A5"><enum>(B)</enum><text>in the case of a
local administrative committee, not less frequently than once each month, and,
in the case of a local advisory committee, not less frequently than once in
each quarter of the year.</text>
</subparagraph></paragraph><paragraph id="HE8AD7FEEF0194042B1602370679395B"><enum>(2)</enum><header>Annual public
meeting</header><text>At least one meeting of the committee each year shall be
open to the public, notice of which shall be published and at which any person
in the area may participate.</text>
</paragraph><paragraph id="H9575AFD8BF3F4C92BA0021DA7E077ED1"><enum>(3)</enum><header>Annual statewide
meetings</header>
<subparagraph id="H276803DD01EE4F838B001596D889304E"><enum>(A)</enum><header>Administrative
officers</header><text>At least once each year there shall be a statewide
meeting of local administrative officers and representatives of local
administrative committees.</text>
</subparagraph><subparagraph id="H3B76DE27D617469DAE2C093EDCA2228"><enum>(B)</enum><header>Local advisory
committees</header><text>At least once in each year there shall be a statewide
meeting of representatives of all local advisory committees in the State, and
any reports or recommendations made at such meeting shall on the request of
such meeting be transmitted through the State agency to the Board.</text>
</subparagraph></paragraph></subsection></section><section id="H0071735807B94A999F5B4E6873F861CD"><enum>304.</enum><header>Local
professional committees</header>
<subsection id="H940657E5B8F743F4847DE0C0E5A431D9"><enum>(a)</enum><header>Establishment</header><text>Local
committees representative of the persons furnishing personal health services in
the area shall be established in each health-service area.</text>
</subsection><subsection id="H339690FF61CB401FB145CF60F3614886"><enum>(b)</enum><header>Functions</header><text>Each
local professional committee shall assist the local administrative committee
and its executive officer, or the local administrative officer and the local
advisory committee, as the case may be, in—</text>
<paragraph id="HC1DC8B9A6E7045A98C1C203532DFA8F1"><enum>(1)</enum><text>the preservation
of the customary freedom and responsibility (under applicable State law) of
practitioners in the exercise of professional judgment as to the care of
patients; and</text>
</paragraph><paragraph id="H7FD693104629436CB233BD5C61EBD497"><enum>(2)</enum><text>in the solution of
technical problems concerning the participation of professional personnel,
hospitals, and other qualified persons in the provision of personal health
services as benefits, and to advise the local administrative or executive
officer and the local area committee regarding matters of professional practice
or conduct arising in connection with the performance of agreements for the
provision of such services.</text>
</paragraph></subsection><subsection id="HDEF24A8BA590465D92A1F95FFFD1604D"><enum>(c)</enum><header>Meetings</header><text>Such
local committees shall meet on call of the local administrative committee or
officer, as the case may be, or upon their own motion. The members of any such
local professional committee may be professional members of the local area
committee or other professional persons or both.</text>
</subsection></section><section id="HEE39AE3AD22C4153A071D4C6E02CB5F0"><enum>305.</enum><header>Methods of
administration</header>
<subsection id="H7F37D6F932584F44B5F16B36305F3131"><enum>(a)</enum><header>In
General</header><text>In each health-service area the methods of administration
shall be such as to—</text>
<paragraph id="HD58A755A1B014BE8BE7B16E64D3E2C1D"><enum>(1)</enum><text>insure the prompt
and efficient care of individuals entitled to personal health services as
benefits;</text>
</paragraph><paragraph id="HC9A02104AC0A4C74006BACD42B5CDEE0"><enum>(2)</enum><text>promote personal
relationships between physician and patients;</text>
</paragraph><paragraph id="H14917C9DCC9143A88ECA65936ED3C02F"><enum>(3)</enum><text>promote
coordination among and between general practitioners, specialists, those who
furnish auxiliary services, nurses, and hospitals, in the furnishing of
services under this Act, between them and public-health centers and agencies,
and educational service, research, and other related agencies or institutions,
and between preventive, diagnostic, and curative services, public and
private;</text>
</paragraph><paragraph id="H5DDCDF452B2041CA0048FB2270443ED0"><enum>(4)</enum><text>aid in the
prevention of disease, disability, and premature death;</text>
</paragraph><paragraph id="H5761E400A17144CDA2EA608C1911A076"><enum>(5)</enum><text>encourage
improvement in the number and distribution of professional personnel and
facilities; and</text>
</paragraph><paragraph id="HC794CDB167B1426A86B2F68B74175F16"><enum>(6)</enum><text>insure the
provision of adequate service with the greatest economy consistent with high
standards of quality.</text>
</paragraph></subsection><subsection id="H1EC9CAEB402B4B1D812BBA711260B102"><enum>(b)</enum><header>Appointment</header><text>Local
administrative officers shall be appointed by the State agency or the head
thereof, in accordance with the merit system provided for in the State plan of
operations. Local administrative committees shall be appointed by such agency
or the head thereof, from individuals residing in the respective health-service
areas, and the executive officers of such committees shall be appointed by the
committees in accordance with the merit system. The local health-service areas
shall be those so designated in such plan. Members of local advisory committees
and of local professional committees shall be selected in accordance with
methods set forth in such plan.</text>
</subsection><subsection id="H9838B3FA671A45E7BB9588EF428212ED"><enum>(c)</enum><header>Compliance With
Provisions</header><text>In exercising their functions and discharging their
responsibilities under this Act, local administrative officers and communities,
local advisory committees, and local professional committees shall observe the
provisions of this Act, and of regulations prescribed thereunder, and of any
regulations, standards, and procedures prescribed by the State agency.</text>
</subsection></section><enum>IV</enum><header>STATE
ADMINISTRATION</header>
<section id="HBD1112A47E0E481784EB743C25A41833"><enum>401.</enum><header>Declaration of
policy</header><text display-inline="no-display-inline">It is the intent of
Congress that the benefits provided under this Act be administered wherever
possible by the several States, in accordance with plans of operations
submitted and approved as provided in this title, and in each State insofar as
feasible by the same State agency which administers, or supervises the
administration of, the State’s general public health and maternal and child
health programs.</text>
</section><section id="HB472510591FD408EA598C9CB3CEE3FB9"><enum>402.</enum><header>State plan of
operations</header>
<subsection id="H50C89C30BDFF480CB3D59E822ED2D4E5"><enum>(a)</enum><header>In
General</header><text>Any State desiring to assume responsibility for the
administration in the State of the personal health-service benefits provided
under this Act to all individuals in the State who are eligible for such
benefits, may do so for the period beginning October 1, 2010 (when benefits
first become available under this Act), or for the period beginning October 1
of any succeeding year, if it has undertaken, through its legislature, to
administer such benefits in accordance with the provisions of this Act and with
the provisions of regulations and standards prescribed thereunder, and, at
least 12 months in advance, has submitted and had approved a State plan of
operations which provides for the following:</text>
<paragraph id="HC64D2D9981E44EA1B56B9D087BCC35AD"><enum>(1)</enum><text>The plan must
designate as the sole agency for the statewide administration of benefits under
this Act a single State agency duly authorized under the law of the State to
administer such benefits within the State in accordance with the provisions of
this Act, the provisions of regulations and standards prescribed thereunder,
and the provisions of the State plan.</text>
</paragraph><paragraph id="HB3F08B86FE0E450D97A44108D3A209C"><enum>(2)</enum><text>The plan must
provide for the designation of a State advisory committee which shall include
members who are familiar with the needs for personal health services in urban
and rural areas, and who are representative of the interests of individuals in
the State who are eligible for benefits, such members to constitute a majority,
and members chosen from the several professions, hospitals, and other
organizations in the State by whom such benefits will be provided, to advise
the State agency in carrying out the administration of such benefits in the
State.</text>
</paragraph><paragraph id="H4660BC9D40F04C8F81D8BCED827D3215"><enum>(3)</enum><text>The plan must
provide for the decentralized administration of this Act in the State in
accordance with title III for the designation of local health-service areas,
and for such methods of selecting the members of local advisory committees and
of local professional committees as are calculated to insure representation of
the nature set forth in sections 303 and 304, respectively.</text>
</paragraph><paragraph id="H885A8984D2454CC4A9AB2C1DCB2114C3"><enum>(4)</enum><text>The plan must
provide for such methods of administration, including methods relating to the
establishment and maintenance of personnel standards on a merit basis (except
that the Board shall exercise no authority with respect to the selection,
tenure of office, or compensation of any individual employed in accordance with
such methods), as are found by the Board to be necessary for the proper and
efficient administration of such benefits in the State.</text>
</paragraph><paragraph id="H3ECBE5816BED4E68ACABA9BCBC4E532"><enum>(5)</enum><text>The plan must
provide for the making of surveys of the resources and needs of the State, in
accordance with section 102(a), and sets forth a program for the administration
of such benefits in the State which gives reasonable assurance (A) that maximum
use will be made of all available health personnel and facilities desiring to
participate in the provision of benefits to eligible individuals, (B) that
funds allotted to the State for the several classes of benefits will be
allocated in such manner as to give reasonable assurance of the availability of
services in all health-service areas in the State, and (C) that any
maldistribution or other inadequacies in the health personnel or facilities
available for such purpose, or in the quality of the services rendered, will be
progressively improved as rapidly as may be practicable.</text>
</paragraph><paragraph id="HCEB29E1BF7C14E240021D795A747CD90"><enum>(6)</enum><text>The plan must
provide that the State agency will make such reports in such form and
containing such information as the Board may from time to time reasonably
require, and give the Board, upon demand, access to the records upon which such
information is based.</text>
</paragraph><paragraph id="HDE8AAD77D2364B72AD7D3B54B1D06DC4"><enum>(7)</enum><text>The plan must
provide that all Federal funds paid to the State agency for purposes of
carrying out this Act in the State shall be properly safeguarded and expended
solely for the purposes for which paid, and must provide for the repayment by
the State to the United States of any such funds lost by the State agency or
diverted from the purposes for which paid.</text>
</paragraph><paragraph id="H9B283269AF224EBD96552DEEF2345F70"><enum>(8)</enum><text>The plan must
provide for cooperation, including where necessary entering into working
agreements (with any appropriate transfer of funds), with other public agencies
of the State or of its political subdivisions concerned with programs related
to the purposes of this Act, and with appropriate agencies of other States or
of the United States administering this Act, or benefits under this Act, in
other States.</text>
</paragraph></subsection><subsection id="H5D057CB823EB4C39A0E670C13B9901E1"><enum>(b)</enum><header>Approval</header><text>The
Board shall approve any State plan and any modification thereof submitted by
the State which it finds complies with the provisions of subsection (a). No
change in a State plan shall be required within one year after initial approval
thereof, or within one year after any change thereafter required therein, by
reason of any change in the regulations or standards prescribed pursuant to
this Act, except with the consent of the State or in accordance with further
action by Congress.</text>
</subsection><subsection id="HAD67B42D91C64493A2C2D2749FAF6A9"><enum>(c)</enum><header>Notice of
Disapproval</header><text>In the event of its disapproval of any plan or any
modification therein submitted by a State pursuant to this title, the Board
shall notify the State of such disapproval and shall, upon request of the
State, afford it reasonable notice and opportunity for a hearing on such
disapproval.</text>
</subsection><subsection id="HA235A1ED59564863B100D3E70D662CC"><enum>(d)</enum><header>Fallback
Administration</header>
<paragraph id="HF7C502285C2B4DE8A18EC17BB175003B"><enum>(1)</enum><header>Notice to
governor</header><text>If a State has not prior to October 1, 2010, submitted
and had approved a plan of operations, the Board shall notify the Governor of
the State that the Board will be required to administer this Act in the State,
commencing October 1, 2010.</text>
</paragraph><paragraph id="H85042C1E650D4199BE0061B384B1353B"><enum>(2)</enum><header>Publication of
notice</header><text>The Board shall provide for the publication of such notice
in at least two newspapers of general circulation in the State.</text>
</paragraph><paragraph id="HF393881664AD4102AF25A2834888DD01"><enum>(3)</enum><header>Continued
administration</header><text>If within 60 days after such notification to the
Governor the State has not submitted an approvable plan, the Board shall
continue such administration until one year after the submission and approval
of a plan of operations in accordance with this section.</text>
</paragraph><paragraph id="H138CE304C8084DD58CB7A34C8E73C8E"><enum>(4)</enum><header>Waiver</header><text>The
Board may waive the requirement that a State plan must be submitted and
approved one year prior to commencement of State administration if it is
satisfied in a particular case that the substitution of a shorter preparatory
period will not prejudice the interests of eligible individuals in the
State.</text>
</paragraph></subsection><subsection id="H645022361A6F427898E79F89D4A598B0"><enum>(e)</enum><header>Noncompliance</header>
<paragraph id="H6BDFF449CBC14451907DB262A689FE62"><enum>(1)</enum><header>Notice</header><text>Whenever
the Board, after reasonable notice and opportunity for hearing to the State,
finds that the State, having submitted and had approved a plan of operations
under this title—</text>
<subparagraph id="HFD60DD4143834EFFAB918C754FDD8493"><enum>(A)</enum><text>is not complying
substantially with the provisions of such plan, or with the provisions of this
Act or any regulations or standards prescribed thereunder, or</text>
</subparagraph><subparagraph id="H313671EC565A47179750A25459105507"><enum>(B)</enum><text>has withdrawn its
plan or failed to change it when and as required by a change in this Act or in
regulations prescribed thereunder,</text>
</subparagraph><continuation-text continuation-text-level="paragraph">the Board
shall notify the Governor of the State of such findings, together with its
reasons therefor and a statement concerning the effect of such findings under
this Act, and shall provide for the publication of such notice in at least two
newspapers of general circulation in the State.</continuation-text></paragraph><paragraph id="H8DE96C6CAC524BCBA9C56F27DCEA9484"><enum>(2)</enum><header>Board assumption
of responsibility</header><text>If within 60 days following such a notice the
State has not taken appropriate action to bring its plan or its administration
thereof into conformity with this Act and regulations and standards thereunder,
the Board shall immediately assume responsibility for the administration of
this Act in the State and shall administer the same in such State for so long
thereafter as the State fails to give reasonable assurances of substantial
compliance or fails to submit an approvable plan, as the case may be.</text>
</paragraph></subsection><subsection id="H05B1A5099FA646B6B0EC30AE746DD54F"><enum>(f)</enum><header>Board
Authority</header><text>In any State in which the Board has assumed
responsibility for the administration of benefits under this Act as provided in
subsections (d) and (e), the Board shall have and discharge all authority and
duties, in accordance with the provisions of this Act, which it finds necessary
for that purpose, and the term <term>State agency</term> wherever used in title
II or title III shall be deemed to refer to the Board.</text>
</subsection><subsection id="H046257FB34FE471896216B11006F4439"><enum>(g)</enum><header>Additional
State-Funded Services</header><text>Nothing in this Act shall preclude any
State or any political subdivision thereof, whether or not the State has
assumed responsibility for the administration of benefits under this Act, from
furnishing, with funds available from sources other than the National Health
Care Trust Fund, any additional health services to individuals who are eligible
for benefits under this Act or any or all health services to individuals who
are not so eligible.</text>
</subsection></section><enum>V</enum><header>NATIONAL HEALTH
INSURANCE BOARD; NATIONAL ADVISORY MEDICAL POLICY COUNCIL; GENERAL
ADMINISTRATIVE PROVISIONS</header>
<section id="HBBDDA9CFB8E24B1580472E00BA6E44C1"><enum>501.</enum><header>National Health
Insurance Board</header>
<subsection id="H16FA3F0B58084D319000B67479FC61AF"><enum>(a)</enum><header>Establishment</header>
<paragraph id="HE6605568087346EEBE332497E1801700"><enum>(1)</enum><header>In
general</header><text>There is hereby established in the Department of Health
and Human Services a National Health Insurance Board.</text>
</paragraph><paragraph id="HA3545FB528584BA497685C48EC2024D6"><enum>(2)</enum><header>Composition</header><text>The
Board shall be composed of 5 members, three of whom shall be appointed by the
President by and with the advice and consent of the Senate, and the other two
of whom shall be the Surgeon General of the Public Health Service and the
Administrator of Social Security. At least one of the appointed members shall
be a doctor of medicine licensed to practice medicine or surgery in one of the
States.</text>
</paragraph><paragraph id="H494155A8EF704CA8BCF9B9F60DBF9F"><enum>(3)</enum><header>No other
employment</header><text>During an appointment member’s term of membership on
the Board, the member shall not shall engage in any other business, vocation,
or employment.</text>
</paragraph><paragraph id="H7CC4650BCA8D49BC91D39FC5789B2B8"><enum>(4)</enum><header>Compensation</header><text>Each
appointed member shall receive a salary at an annual rate of basic pay,
established by the President, which is not less than the annual rate of basic
pay for positions at level V of the Executive Schedule and which is not greater
than the annual rate of basic pay for positions at level IV of the Executive
Schedule.</text>
</paragraph><paragraph id="H65B1D48C80C7433181344F49FAAB88AE"><enum>(5)</enum><header>Term</header><text>Each
appointed member shall hold office for a term of six years, except that—</text>
<subparagraph id="HF3A158CD49D748C9A4419938F75CAFF1"><enum>(A)</enum><text>any member
appointed to fill a vacancy occurring prior to the expiration of the term for
which the member’s predecessor was appointed shall be appointed for the
remainder of such term; and</text>
</subparagraph><subparagraph id="H814C4A1ECC5C415CAD83BE2CEED115EE"><enum>(B)</enum><text>the terms of
office of the members first taking office after the date of the enactment of
this Act shall expire, as designated by the President at the time of
appointment, one at the end of two years, one at the end of four years, and one
at the end of six years, after the date of the enactment of this Act.</text>
</subparagraph></paragraph><paragraph id="H361C1B0C366E40BBBDA01530F96CFAAD"><enum>(6)</enum><header>Designation of
chairman</header><text>The President shall designate one of the appointed
members as the Chairman of the Board.</text>
</paragraph></subsection><subsection id="H1777E2C595F7473CA0001CA62EEDB070"><enum>(b)</enum><header>Functions</header>
<paragraph id="H64534DA147CE4191ADDF6007900C7CB"><enum>(1)</enum><header>Supervision</header><text>All
functions of the Board shall be administered by the Board under the direction
and supervision of the Secretary of Health and Human Services. The board shall
perform such functions as it finds necessary to carry out the provisions of
this Act, and shall make all regulations and standards specifically authorized
to be made in this Act and such other regulations not inconsistent with this
Act as may be necessary.</text>
</paragraph><paragraph id="HE760F70C27A642529895AFD9F6672154"><enum>(2)</enum><header>Delegation</header><text>The
Board may delegate to any of its members, officers, or employees, or with the
approval of the Secretary to any other officer or employee of the Department of
Health and Human Services, such of its powers or duties, except that of making
regulations, as it may consider necessary and proper to carry out the
provisions of this Act.</text>
</paragraph><paragraph id="H0FEA0848FC354E6C80641F14E0DE008B"><enum>(3)</enum><header>Contract
authority</header><text>The Board may also enter into agreements for the
furnishing or provision of personal health services under this Act without
regard to the provisions of title 5, United States Code, pertaining to the
appointment, status, or compensation of Federal employees, or pertaining to
contracts for personal services, and without regard to section 3709 of the
Revised Statutes (41 U.S.C. 5), and any person rendering services pursuant to
an agreement so made shall not by reason thereof be deemed to be an employee of
the United States.</text>
</paragraph></subsection><subsection id="H5736113979904BB5AC000009A0898209"><enum>(c)</enum><header>Use of Executive
Agencies</header><text>In administering the provisions of this Act, the Board
is authorized to utilize the services and facilities of any executive
department or other agency of the United States in accordance with an agreement
with the head thereof. Payment for such services and facilities shall be made
in advance or by way of reimbursement, as may be agreed upon with the head of
the executive department or other agency furnishing them.</text>
</subsection><subsection id="H02381DF3A97646D1BDD97835B7EF0000"><enum>(d)</enum><header>Personnel</header>
<paragraph id="HF54B95D13FC24C1A9DBB7EC5C5CBEC89"><enum>(1)</enum><header>In
general</header><text>Personnel of the Board shall be appointed by the
Secretary upon recommendation of the Board.</text>
</paragraph><paragraph id="HC417B3ECC7B54748AA46A7778E08FFC6"><enum>(2)</enum><header>Detailing of
employees to board</header><text>The Secretary is authorized to detail to the
Board, upon its request, any officer or employee of the Department of Health
and Human Services, and in the Secretary’s discretion to reimburse, from funds
available for the administration of this Act, the appropriation from which the
salary or, in the case of commissioned officers of the Public Health Service,
the pay and allowances of such officer or employee are paid.</text>
</paragraph></subsection><subsection id="H72CFFA3A070B4DAF96EEC163A56EDFE"><enum>(e)</enum><header>Detailing of
Board Employees</header><text>Upon the request of any State agency
administering a State plan of operations pursuant to title IV, or upon the
request of any State desiring to prepare and submit a plan of operations, any
officer or employee of the Board (including any officer or employee detailed to
the Board pursuant to subsection (d)) may be detailed by the Board to assist in
the administration, or in the preparation, of such State plan of operations.
The funds available for the Federal administration of this Act may, in the
discretion of the Secretary, be reimbursed from funds allotted to the State
pursuant to section 802 and available for State administration, for the salary
(or for the pay and allowances) of any officer or employee so detailed.</text>
</subsection></section><section id="HF356F2324A3445B0B49EB8BF9B7198"><enum>502.</enum><header>Advisory
Council</header>
<subsection id="HDAEC19BE21B8498C8D33C33CCC18D6A1"><enum>(a)</enum><header>Establishment</header>
<paragraph id="HF12B6C6433C848B091DD9000ACC12378"><enum>(1)</enum><header>In
general</header><text>There is hereby established a National Advisory Medical
Policy Council.</text>
</paragraph><paragraph id="HF429895194BC43C68E6041B37E118C05"><enum>(2)</enum><header>Composition</header><text>The
Council shall consist of the Chairman of the Board, who shall serve as Chairman
of the Advisory Council ex officio, and 16 members appointed by the Secretary
of Health and Human Services. At least 8 of the 16 appointed members shall be
individuals who are familiar with the need for personal health services in
urban or rural areas and who are representative of the interests of individuals
eligible for benefits under this Act, and at least 6 of the members shall be
individuals who are outstanding in the medical or other professions concerned
with the provision of services provided as benefits under this Act and who are
representative of the individuals, organizations, and other persons by whom
personal health services will be provided.</text>
</paragraph><paragraph id="HA4FCA40771EF42D5A9183808F7E666E"><enum>(3)</enum><header>Term</header><text>Each
appointed member shall hold office for a term of 4 years, except that any
member appointed to fill a vacancy occurring prior to the expiration of the
term for which the member’s predecessor was appointed shall be appointed for
the remainder of that term, and the terms of the members first taking office
shall expire, as designated by the Secretary at the time of appointment, four
at the end of the first year, four at the end of the second year, four at the
end of the third year, and four at the end of the fourth year after the date of
appointment.</text>
</paragraph><paragraph id="HEBB1361C52E3405A9DE52727B5C6FB0"><enum>(4)</enum><header>Technical and
professional advisory committees</header><text>The Advisory Council is
authorized to appoint such special advisory technical or professional
committees as may be useful in carrying out its functions, and the members of
such committees may be members of the Advisory Council, or other persons, or
both.</text>
</paragraph><paragraph id="H5B8879BA37CF4E37BBC23095B6B87900"><enum>(5)</enum><header>Compensation</header><text>Appointed
Advisory Council members and members of technical or professional committees,
while serving on business of the Council (inclusive of traveltime), shall
receive compensation at rates fixed by the Secretary, but not exceeding $200
per day, and shall be entitled to receive actual and necessary traveling
expenses and per diem in lieu of subsistence while so serving away from their
places of residence.</text>
</paragraph><paragraph id="HFF9B2B1CAADC404DB4C1007BF0050046"><enum>(6)</enum><header>Support
services</header><text>The Advisory Council, its appointed members, and its
committees, shall be provided with such secretarial, clerical, or other
assistance as may be provided by the Congress for carrying out their respective
functions.</text>
</paragraph><paragraph id="HB56635760DFA47A296011717CCAA63E3"><enum>(7)</enum><header>Meetings</header><text>The
Advisory Council shall meet as frequently as the Board deems necessary, but not
less than twice each year. Upon request by six or more members, it shall be the
duty of the Chairman to call a meeting of the Council.</text>
</paragraph></subsection><subsection id="HDCB4C251743440AE994E05FCFF029CCE"><enum>(b)</enum><header>Functions</header><text>The
Advisory Council shall advise the Board with reference to matters of general
policy and administration arising in connection with the making of regulations,
the establishment of professional standards, and the performance of its other
duties under this Act.</text>
</subsection><subsection id="H9E97D5770E5340879DCE455E02938E76"><enum>(c)</enum><header>Indefinite
Duration</header><text>Section 14 of the <act-name parsable-cite="FACA">Federal
Advisory Committee Act</act-name> shall not apply to the Advisory
Council.</text>
</subsection></section><section id="H19AD91055F304E2BB7A5583628F67860"><enum>503.</enum><header>Studies,
recommendations, and reports</header>
<subsection id="H573D426433644259A6E6361EEE6829CB"><enum>(a)</enum><header>In
General</header><text>The Board shall have the duty of studying and making
recommendations as to the most effective methods of providing health services,
and as to legislation and matters of administrative policy concerning health
and related subjects.</text>
</subsection><subsection id="HD7DCB891CC8E412BBA950079ABB00F2"><enum>(b)</enum><header>Annual
Reports</header><text>At the beginning of each regular session of Congress, it
shall make a full report to Congress of the administration of this Act,
including a report with regard to the adequacy of its financial provisions
contained in this Act and of appropriations made pursuant thereto, the methods
of allotment of funds among the States, and related matters. Such report shall
include a record of consultations with the Advisory Council, recommendations of
the Advisory Council, and comments thereon.</text>
</subsection></section><section id="H23865B4701714D040043F90049D78E3"><enum>504.</enum><header>Nondisclosure of
information</header>
<subsection id="H8DD9859B5F99447F8CC8D2FE308C7CDA"><enum>(a)</enum><header>Confidentiality</header><text>Information
concerning an individual, obtained from the individual or from any physician,
dentist, nurse, or hospital, or from any other person pursuant to or as a
result of the administration of this Act, shall be held confidential (except
for statistical purposes) and shall not be disclosed or be open to public
inspection in any manner revealing the identity of the individual or other
person from whom the information was obtained or to whom the information
pertains, except as may be necessary for the proper administration of this Act
or of other laws, State or Federal.</text>
</subsection><subsection id="H0703D204DA474A7EAFA5A2BE23588042"><enum>(b)</enum><header>Penalty</header><text>Any
person who shall violate any provision of subsection (a) shall be deemed guilty
of a misdemeanor and, upon conviction thereof, shall be punished by a fine not
exceeding $50,000 or by imprisonment not exceeding one year, or both.</text>
</subsection></section><section id="H75E60D5FB9354A588EFBD075EACAAB80"><enum>505.</enum><header>Prohibition
against discrimination</header><text display-inline="no-display-inline">In
carrying out the provisions of this Act there shall be no discrimination on
account of race, creed, or color. Personal health services shall be made
available as benefits to all eligible individuals, and all persons qualified
under title II to enter into agreements to furnish or provide such services
shall be permitted to do so.</text>
</section><enum>VI</enum><header>ELIGIBILITY
DETERMINATIONS, COMPLAINTS, HEARINGS, AND JUDICIAL REVIEW</header>
<section id="H5DE8EEA4EEF648DEA0D79835BEC010B6"><enum>601.</enum><header>Determinations
as to eligibility for benefits</header>
<subsection id="H693851688A8E46C1AEAF7F8122F86D33"><enum>(a)</enum><header>In
General</header><text>The Secretary of Health and Human Services through such
units of the Department of Health and Human Services as the Secretary may
determine, shall upon the Secretary’s own initiative or upon application of any
individual make determinations as to the eligibility of individuals for
benefits under this Act. Whenever requested by any individual determined by the
Secretary not to be eligible for benefits for any period, or by a dependent of
any such individual, the Secretary shall give such individual or such dependent
reasonable notice and opportunity for a hearing with respect to such
determination and on the basis of the evidence adduced at the hearing shall
affirm, modify, or reverse the Secretary’s determination.</text>
</subsection><subsection id="H80B3F8CB069E4ABFAC0049999E52DC32"><enum>(b)</enum><header>Authority</header>
<paragraph id="H63E406670C9A428EA3116000012328E4"><enum>(1)</enum><header>In
general</header><text>In carrying out the Secretary’s responsibility under this
section, the Secretary shall have all the powers and duties conferred upon the
Secretary under sections 205 and 206 of the <act-name parsable-cite="SSA">Social Security Act</act-name>. Such powers and duties
shall be subject to the same limitations and rights of judicial review as are
contained in section 205 of such Act.</text>
</paragraph><paragraph id="HD6C05C5F19774D0595F71F8C00C60021"><enum>(2)</enum><header>Civil service
eligibility determinations</header><text>Eligibility for benefits under this
title based on entitlement to an annuity under subchapter III (relating to
civil service retirement) of chapter 83 of title 5, United States Code, shall
be determined on the basis of certification by the Office of Personnel
Management.</text>
</paragraph></subsection><subsection id="H295C8EB27C7B4644906132C58C1DA4C2"><enum>(c)</enum><header>Role of
States</header><text>Nothing in title IV shall be deemed to require or
authorize any assumption by the State agency, designated in accordance with an
approved State plan of operations approved under such title, of any of the
Secretary’s responsibilities under this section, but the Secretary may utilize
existing facilities and services of any such agency on the basis of mutual
agreements with such agency.</text>
</subsection></section><section id="H8826629DED764AEAB8BBB0B8A8EEB06E"><enum>602.</enum><header>Complaints of
eligible individuals and of persons furnishing benefits</header>
<subsection id="HB3A98C1308B9404A8458AAB644FEADE"><enum>(a)</enum><header>In
General</header>
<paragraph id="HB6046C516B04418F9E06B1F0DAF137B"><enum>(1)</enum><header>Filing</header><text>Any
eligible individual aggrieved by reason of the individual’s failure to receive
any personal health-service benefits to which the believes entitled, or
dissatisfied with any service rendered the individual as a personal
health-service benefit, and any person who has entered into an agreement to
furnish services as personal health-service benefits and who is aggrieved by
the failure or alleged failure of a local or other administrative officer or a
local administrative committee to carry out the agreement in accordance with
its terms, may make a complaint to the local administrative officer or local
executive officer in the area in which the action or inaction complained of
occurred, or to such other officer as may be provided in regulations.</text>
</paragraph><paragraph id="HE6E7CCBAEF994C25A7261E8E5644232E"><enum>(2)</enum><header>Response</header><text>If
the officer to whom such complaint is made finds, after investigation, that the
complaint is well founded, the officer shall promptly—</text>
<subparagraph id="H30E1768E1B9241AD92E880EE33F1407E"><enum>(A)</enum><text>take such steps as
may be necessary and appropriate to correct the action or inaction complained
of; and</text>
</subparagraph><subparagraph id="H4502E579284C4ADC9462C57461977DC2"><enum>(B)</enum><text>notify the
individual or other person making the complaint of the officer’s disposition
thereof.</text>
</subparagraph></paragraph><paragraph id="H58E5EEF932664662AB1CE6A2005CCD67"><enum>(3)</enum><header>Hearing</header><text>Any
such individual or other person dissatisfied with the action taken may in
writing request a hearing thereon and shall be afforded opportunity for the
same pursuant to subsection (b).</text>
</paragraph></subsection><subsection id="HB176686F44C04A00BE2C90DF1F8403FA"><enum>(b)</enum><header>Hearings</header>
<paragraph id="H2DDB03EA1B9A4235A3C4634628D61DDF"><enum>(1)</enum><header>In
general</header><text>Provision shall be made for the establishment of
necessary and sufficient impartial tribunals to afford hearings to individuals
and other persons entitled thereto under subsection (a), or section 207(d), and
for further review of the findings, conclusions, and recommendations of such
tribunals, in accordance with regulations made by the Board, after consultation
with the Advisory Council.</text>
</paragraph><paragraph id="H1D00B63CAF23459D8BCC7F84386F00BD"><enum>(2)</enum><header>Specific
subjects</header><text>With respect to any complaint involving—</text>
<subparagraph id="H17D5DBF0D1694CD3B214B3EF5BC251F9"><enum>(A)</enum><text>matters or
questions of professional practice or conduct, the hearing body shall contain
competent and disinterested professional representation; and</text>
</subparagraph><subparagraph id="H4E627934F9F849B7ACE13E870012286F"><enum>(B)</enum><text>only matters or
questions of professional practice or conduct, the hearing body shall consist
exclusively of such professional persons.</text>
</subparagraph></paragraph></subsection><subsection id="H2FA01CF0197C47FC9B00B66AC45016B"><enum>(c)</enum><header>Powers of
Board</header><text>In administering this section in any State which has not
assumed responsibility for the administration of benefits under this Act as
provided in title IV, the Board (subject to the provisions of section 501(b))
shall, insofar as they are applicable to its functions under this Act, have all
the powers and duties conferred upon the Secretary by sections 205 and 206 of
the <act-name parsable-cite="SSA">Social Security Act</act-name>. Such powers
and duties shall be subject to the limitations and rights of judicial review
contained in section 205 of such Act.</text>
</subsection><subsection id="H1035CE2F03A4456FA4716D4539C02BAC"><enum>(d)</enum><header>Judicial
Review</header><text>In any State which has assumed responsibility for the
administration of benefits under this Act as provided in title IV the powers
and duties of the State agency shall be subject to such rights of judicial
review in the courts of the State as the law of the State may provide; subject,
however, to review by the Supreme Court of the United States in such cases and
in such manner as is provided in section 1257 of title 28 of the United States
Code.</text>
</subsection></section><enum>VII</enum><header>APPLICATION OF
ACT TO INDIVIDUALS COVERED UNDER MEDICARE PROGRAM</header>
<section id="HEFF3D6EB89D4491100F0D77D6DD1009D"><enum>701.</enum><header>Eligibility;
benefits available</header>
<subsection id="H857507F9188A49B5A03843F540301F43"><enum>(a)</enum><header>Limitation to
Supplementary Benefits</header>
<paragraph id="HF3E71687A57841DD866E008F79BA00FE"><enum>(1)</enum><header>In
general</header><text>In the case of any individual who is entitled to hospital
insurance benefits under part A of title XVIII of the
<act-name parsable-cite="SSA">Social Security Act</act-name>, or to
supplementary medical insurance benefits under the insurance program
established by part B of such title, during any benefit year or part thereof in
which the individual is otherwise eligible for benefits under this Act in
accordance with section 104 or would otherwise be furnished such benefits in
accordance with section 105, the personal health services (specified in section
101) which may be made available to the individual as benefits under this Act
shall be limited to those services (otherwise available to the individual in
accordance with section 102) for which the individual is ineligible under part
A or B of such title XVIII.</text>
</paragraph><paragraph id="HC73584C68F5F40FFB955CE8A3B6A6B4"><enum>(2)</enum><header>Treatment</header><text>For
purposes of paragraph (1), an individual shall be considered ineligible under
part A or B of such title XVIII if no payment is or can be made to the
individual or on the individual’s behalf thereunder with respect to the item or
service involved, whether because the individual is not entitled to benefits
under whichever such part is applicable, because no payment is provided under
either such part for the item or service involved, or because the individual
has exhausted entitlement to have payment made thereunder for items or services
of the type involved. An individual shall also be considered ineligible under
part A or B of such title XVIII with respect to any item or service (for which
the individual is otherwise entitled to have payment made thereunder) to the
extent that payment is not made with respect to such item or service because of
the application of the deductible and coinsurance provisions of sections 1813
and 1833 of the <act-name parsable-cite="SSA">Social Security
Act</act-name>.</text>
</paragraph></subsection><subsection id="H40134E358FC74D44912EF97ED469E92F"><enum>(b)</enum><header>Regulations</header><text>The
Board, after consultation with the Advisory Council, shall prescribe such
regulations as may be necessary or appropriate to insure, in the case of
individuals whose benefits under this Act are limited under subsection (a),
that the combination of benefits under this Act and title XVIII of the
<act-name parsable-cite="SSA">Social Security Act</act-name> will effectively
carry out (without duplication of benefits) the purpose of this Act.</text>
</subsection><subsection id="H8F8FE70DAE8D4FE898793B05E9AF3E16"><enum>(c)</enum><header>No Impact on
Dependents</header><text>The limitation under subsection (a) of an individual’s
benefits under this Act shall not be construed as affecting the eligibility of
the individual’s dependents for such benefits in accordance with subsection
(a)(3) or (b)(3) of section 104.</text>
</subsection></section><section id="H0562BCE4E9804BA1A5193664BCC8EBD2"><enum>702.</enum><header>Study and
report</header>
<subsection id="H8F5C2781F6974B96BD1BDA8EA2BD0050"><enum>(a)</enum><header>Study</header><text>As
soon as practicable after the date of the enactment of this Act, the Secretary
of Health and Human Services shall undertake and carry out a full and complete
study of the interrelationship of the program of national health insurance
under this Act and the program of health insurance under title XVIII of the
<act-name parsable-cite="SSA">Social Security Act</act-name>, in order to
determine the way in which the latter program may be most effectively and
equitably transferred to and incorporated in the program under this Act.</text>
</subsection><subsection id="H1E88F76CDA1E4360A9275E47CC8073E7"><enum>(b)</enum><header>Considerations</header><text>In
conducting such study, the Secretary shall give particular attention to the
transitional problems which would result from such a transfer, and shall
consider in detail (with respect to each such program)—</text>
<paragraph id="H92BDC195A7B84BF5B2BD5100E271AEBD"><enum>(1)</enum><text>the benefits
provided;</text>
</paragraph><paragraph id="H84E2D419E6E544A291A85B5C62022669"><enum>(2)</enum><text>the standards of
eligibility therefor;</text>
</paragraph><paragraph id="H31BBB5DA6BE94294A075A6F8C1A0392D"><enum>(3)</enum><text>the standards and
qualifications for participation by providers of services of various
types;</text>
</paragraph><paragraph id="H35D39F1CBBDB4E49A887E800E495D603"><enum>(4)</enum><text>the methods of
administration;</text>
</paragraph><paragraph id="HDED239A725CD434A8029E0035594FAC"><enum>(5)</enum><text>the costs and
methods of financing; and</text>
</paragraph><paragraph id="H65C488204A2345408467B161C0B4F5F8"><enum>(6)</enum><text>any other matters
which might assist in making such determination and in insuring that all
desirable features of the program under title XVIII of the
<act-name parsable-cite="SSA">Social Security Act</act-name> will to the
maximum extent feasible be preserved with respect to the individuals covered by
that program (and, in appropriate cases, included in the program under this Act
for all individuals who are eligible thereunder, without regard to any
transfer).</text>
</paragraph></subsection><subsection id="H4E25230FAE7D4B299197CFCA04B53225"><enum>(c)</enum><header>Report</header><text>The
Secretary shall submit to the President and the Congress, no later than one
year after the date of the enactment of this Act, a complete report of the
study conducted under this section together with the Secretary’s findings as to
the most effective and equitable way in which the transfer under consideration
could be effected and detailed recommendations for legislative, administrative,
and other actions to accomplish it.</text>
</subsection></section><enum>VIII</enum><header>FISCAL
PROVISIONS</header>
<section id="H259026F41A05400CBB36E2F333D6273F"><enum>801.</enum><header>Use of Trust
Fund</header>
<subsection id="H97EECDA7AAD142AE92321F24B8384020"><enum>(a)</enum><header>Availability of
Funds</header><text>Funds in the National Health Care Trust Fund shall be
available for all expenditures necessary or appropriate to carry out this Act;
except that (subject to the provisions of section 802(g)) only so much of such
funds shall be available for salaries or other administrative expenses of any
department or agency of the United States as may be authorized in annual or
other appropriation Acts.</text>
</subsection><subsection id="H7A266DEB8D604E7D995822039733576C"><enum>(b)</enum><header>Deposit of
Reimbursements</header><text>Sums received as reimbursements to the National
Health Care Trust Fund pursuant to section 104(c) or section 105, or by virtue
of subrogation pursuant to section 104(c), shall be deposited in the National
Health Care Trust Fund and shall be available in accordance with the provisions
of subsection (a).</text>
</subsection></section><section id="H6E0A8CDC85834E388995EA7F4CA9FBC"><enum>802.</enum><header>Allotment of
funds</header>
<subsection id="H0A922EC81D4A4A7FA6CCE72E08733ECF"><enum>(a)</enum><header>For Classes of
Services</header>
<paragraph id="HE9137AEA5D46424E9FDD14E662ACCF8F"><enum>(1)</enum><header>In
general</header><text>The Board, after consultation with the Advisory Council,
shall determine, as far in advance of the beginning of each fiscal year as is
possible, the sums which shall be available from the Trust Fund for provision
during the fiscal year of all classes, and of each of the five classes, of
personal health-service benefits specified in section 101(a).</text>
</paragraph><paragraph id="HFBCA8AD43F8D44BAA9EAA3845389557"><enum>(2)</enum><header>Considerations</header><text>Such
sums shall be determined, after taking into consideration the estimated amount
which will be in the Trust Fund at the beginning of the fiscal year and the
anticipated income of the National Health Care Trust Fund thereafter, with a
view—</text>
<subparagraph id="H4D03A9FE28854484A9CA33F0C8ACABA4"><enum>(A)</enum><text>to maintaining as
nearly as practicable a uniform rate of expenditure for personal health-service
benefits in successive fiscal years, except for appropriated allowance on
account of anticipated increase in the personnel and facilities available to
furnish personal health-service benefits and on account of reduction or
withdrawal of restrictions or limitations pursuant to section 102(b);
and</text>
</subparagraph><subparagraph id="HF58830FEE13B47C4825763822100F89B"><enum>(B)</enum><text>to establishing
and maintaining a reserve in the Trust Fund adequate to meet emergency demands
in accordance with subsection (d) and adequate to maintain the rate of
expenditure or to permit its gradual reduction if the income of the Trust Fund
should fall below the income which had been anticipated.</text>
</subparagraph></paragraph></subsection><subsection id="HDA4FA9AFF5534239AAEB4359FB00A993"><enum>(b)</enum><header>Initial State
Allotments</header>
<paragraph id="HA1D49E9418824B2D83D32607BDA6D934"><enum>(1)</enum><header>In
general</header><text>In accordance with regulations prescribed after
consultation with the State agencies, the Board, prior to the beginning of each
fiscal year shall allot to the several States, for the fiscal years 2010, 2011,
and 2012, 90 percent, and for each fiscal year thereafter 95 percent of each
sum determined pursuant to subsection (a).</text>
</paragraph><paragraph id="H1745E59420F343C4B25748FA78F7B2D"><enum>(2)</enum><header>Basis of
allotments</header><text>Such regulations shall provide for allotments on the
basis of—</text>
<subparagraph id="H3F800F7E25C24921AFFD44FC1C01B1E1"><enum>(A)</enum><text>the population in
the several States eligible for benefits under this Act;</text>
</subparagraph><subparagraph id="H7821F04382FB4E548E9EF1AFE53BF9FE"><enum>(B)</enum><text>professional and
other personnel, hospitals, and other facilities, and supplies and commodities,
to be available in the several States in the provision of such benefits;
and</text>
</subparagraph><subparagraph id="HF846EC9110394A78B4F99644530015E1"><enum>(C)</enum><text>the cost of
reasonable and equitable compensation to such personnel and facilities and for
such supplies and commodities.</text>
</subparagraph></paragraph><paragraph id="HA1D79F2199954E5B8D3DAAC9FEF0E200"><enum>(3)</enum><header>Operation of
allotments</header><text>Such allotments shall operate, to the maximum extent
possible, both to assure provision to eligible individuals of adequate personal
health-service benefits in all States and all local health-service areas, and
also to increase the adequacy of services where personnel and facilities are
below the national average.</text>
</paragraph></subsection><subsection id="HF15B1B6CBA964DF9B5727100D8E6F604"><enum>(c)</enum><header>Allotment of
Remainder to States</header>
<paragraph id="H5B9547F4DEE5410097B1CB78EB142CC"><enum>(1)</enum><header>In
general</header><text>From time to time during each fiscal year, the Board
shall allot to the several States the remaining 10 percent or the remaining 5
percent, as the case may be, of each sum determined pursuant to subsection
(a).</text>
</paragraph><paragraph id="H4FCAA52B843C488F8F9C931C3FA0A619"><enum>(2)</enum><header>Considerations</header><text>In
making allotments under this subsection, the Board shall take into
consideration the factors specified in subsection (b), but shall, in addition,
give special consideration to the extent of which allotments under subsection
(b) have proved to be insufficient to permit provision of reasonably adequate
benefits under this Act.</text>
</paragraph></subsection><subsection id="H222E9268F4774B2EBD18554940D9E77E"><enum>(d)</enum><header>Emergency
Allotments</header><text>In addition to the sums determined pursuant to
subsection (a) to be available for the provision of personal health-service
benefits, the Board, after consultation with the Advisory Council, is
authorized to make emergency allotments from the National Health Care Trust
Fund if it finds that a disaster, epidemic, or other cause has substantially
increased the volume of personal health-service benefits required in any part
of the United States over the volume anticipated when the determinations
pursuant to subsection (a) were made. Allotments pursuant to this subsection
shall be made to such State or States, for such class or classes of personal
health-service benefits, and in such amounts, as the Board may find necessary
to meet the emergency.</text>
</subsection><subsection id="H0425B2BF7A7742198400C83668B55749"><enum>(e)</enum><header>Payment From
Allotments</header><text>The Board shall from time to time determine the
amounts to be paid to each State from its allotments under this section, and
shall certify to the Secretary of the Treasury the amounts so determined. The
Secretary shall thereupon, and prior to audit or settlement by the General
Accounting Office, pay to the State the amounts so certified.</text>
</subsection><subsection id="H86F8BDE2D825425DAFA0FF26AF05179D"><enum>(f)</enum><header>Use of
Funds</header>
<paragraph id="H31AC3872430D412FAEC95D57F6CCDBE"><enum>(1)</enum><header>In
general</header><text>Funds paid to a State for any class of personal
health-service benefits shall be used exclusively for the provision of benefits
of that class, except that the administrative costs of the State in
administering personal health-service benefits under this Act may be met from
the allotments to the State.</text>
</paragraph><paragraph id="H194FD3DCE64A4D639549A0A779F49CA1"><enum>(2)</enum><header>Limitation on
administrative costs</header><text>Such administrative costs, which in any
fiscal year shall not exceed 5 percent of the aggregate allotments to the State
for such fiscal year, shall be apportioned as between the several allotments in
accordance with the costs of administering the respective classes of benefits.
Such apportionment may be made in such manner, and by such sampling,
statistical, or other methods, as may be agreed upon between the Board and the
State agency.</text>
</paragraph></subsection><subsection id="H6C56981948FE40F681E2B91CACA7DD70"><enum>(g)</enum><header>Board Assumption
of Responsibility</header><text>In any case in which the Board has assumed
responsibility for the administration in a State of benefits under this Act in
accordance with section 402 (d) or (e), all allotments or balances of
allotments to such State shall be available for expenditure by the Board for
the provision of personal health-service benefits in that State, and (until the
Congress shall make funds available therefor pursuant to section 801(a)) for
the costs of administration of such benefits in such State. Expenditures
authorized pursuant to section 801(a) for such costs of administration shall be
charged against allotments to such State.</text>
</subsection></section><section id="HB9701008B37943928C6E18032B23EBE4"><enum>803.</enum><header>Grants-in-aid
for training and education</header>
<subsection id="HC4D6D44D2A1B4F5388DBC8259F1345F"><enum>(a)</enum><header>Authority</header><text>For
the purpose of increasing the availability of training and education for
professional and technical personnel engaged or undertaking to engage in the
provision or administration of personal health services as benefits under this
Act, and to carry out the policies of section 209(a), the Board is authorized
to make grants—</text>
<paragraph id="H48CC35E1FF574A8EAD1898CB548EF1F5"><enum>(1)</enum><text>to public or
nonprofit institutions or agencies engaging in undergraduate or postgraduate
professional, technical, or administration education or training, for the cost
(in whole or in part) of courses or projects which the Board finds, after
consultation with the Advisory Council and appropriate Federal departments and
agencies, (A) cannot be carried out without financial assistance under this
section, and (B) show promise of making valuable contributions to the
education, training, or retraining of professional or technical personnel
engaged or undertaking to engage in the provision or administration of
benefits, or</text>
</paragraph><paragraph id="H7441C9C92A1D4A7BA060837F5C8F35D5"><enum>(2)</enum><text>to individuals who
are professional or technical persons engaged or who undertake to engage in the
provision of personal health-service benefits, or who are engaged or undertake
to engage in the administration of such benefits, for maintenance (in whole or
in part) while in attendance at courses or projects assisted under paragraph
(1) or approved by the Board for similar training or education, and for costs
of necessary travel.</text>
</paragraph></subsection><subsection id="H31109EB668314EBCB37E22C2CDECA6CA"><enum>(b)</enum><header>Payment Under
Grants</header><text>Such grants, in such amounts and for payment at such times
as are approved by the Board, shall be certified for payment to the Secretary
of the Treasury, who shall pay them from the National Health Care Trust Fund to
the designated individuals, institutions, or agencies.</text>
</subsection><subsection id="H3A2E7DC819C1481CBB31FD130839E0F0"><enum>(c)</enum><header>Availability of
Funds</header><text>For the purposes of this section there shall be available
for the fiscal year 2010 the sum of $5,000,000, for the fiscal year 2011 the
sum of $5,000,000, and for each fiscal year thereafter an amount not to exceed
one-half of 1 percent of the amount expended for benefits under this Act in the
last preceding calendar year.</text>
</subsection></section><enum>IX</enum><header>MISCELLANEOUS
PROVISIONS</header>
<section id="HA9A3810E8384462F98584CA3D3A2443E"><enum>901.</enum><header>Definitions</header><text display-inline="no-display-inline">As used in this Act:</text>
<paragraph id="HA8AAFAD4E0AA40E8BCCD97F5045B2C71"><enum>(1)</enum><header>Wages</header><text>The
term <term>wages</term> means the sum of the following items, excluding any
amount in excess of the applicable contribution and benefit base (as determined
under section 230 of the <act-name parsable-cite="SSA">Social Security
Act</act-name> with respect to the hospital insurance tax) which is received
(or, in the case of income from self-employment, accrued) by any individual
during any calendar year—</text>
<subparagraph id="HE671D04924E540AD92BCDC6BA74CF2CC"><enum>(A)</enum><text>all remuneration
for employment, including the cash value of all remuneration paid in any medium
other than cash; except that such term does not include—</text>
<clause id="HB40AC2F8F9184E35AC8FDCA0EC999CB"><enum>(i)</enum><text>the
amount of any payment made to, or on behalf of, an employee under a plan or
system established by an employer which makes provision for the employer’s
employees generally or for a class or classes of the employer’s employees
(including any amount paid by an employer for insurance or annuities, or into a
fund to provide for any such payment), on account of retirement, or sickness or
accident disability, or medical and hospitalization expenses in connection with
sickness or accident disability, or death; provided, in the case of a death
benefit, that the employee (I) has not the option to receive, instead of
provision for such death benefit, any part of such payment or, if such death
benefit is insured, any part of the premiums (or contributions to premiums)
paid by the employee’s employer, and (II) has not the right, under the
provisions of the plan or system or policy of insurance providing for such
death benefit, to assign such benefit, or to receive a cash consideration in
lieu of such benefit either upon the employee’s withdrawal from the plan or
system providing for such benefit or upon termination of such plan or system or
policy of insurance or of the employee’s employment with such employer;</text>
</clause><clause id="H19E00AFC84834DEB98CB287C73CEA57F"><enum>(ii)</enum><text>the
payment by an employer (without deductions from the remuneration of the
employee) of any social-insurance taxes or contributions imposed upon an
employee; or</text>
</clause><clause id="H2395F3D82B8A40E50081C9F78FD78F59"><enum>(iii)</enum><text>the value of
services exchanged for other services for which there is no payment other than
the exchange; and</text>
</clause></subparagraph><subparagraph id="H994CC35E86A94C599F6BC28573DB003E"><enum>(B)</enum><text>all net income
from farm, business, professional, or other self-employment.</text>
</subparagraph></paragraph><paragraph id="H97EC8DFC29504031B0B1FF26CE003281"><enum>(2)</enum><header>Employment</header><text>The
term <term>employment</term> means any service of whatever nature performed by
an employee for the person employing the employee, irrespective of the
citizenship or residence of either, within United States, or on or in
connection with an American vessel or an American civil aircraft under a
contract of service which is entered into within the United States or during
the performance of which the vessel or aircraft touches at a port or airport in
the United States, if the employee is employed on and in connection with such
vessel or aircraft when outside the United States, except—</text>
<subparagraph id="H61DA53DC01AF4BF5B60087761E3E2049"><enum>(A)</enum><text>service on active
duty in the Armed Forces of the United States;</text>
</subparagraph><subparagraph id="H66225F2191DA456FB8E243C36F38D563"><enum>(B)</enum><text>service performed
in the employ of a State or any political subdivision thereof, or any
instrumentality of any one or more of the foregoing which is wholly owned by
one or more States or political subdivisions;</text>
</subparagraph><subparagraph id="H8597F86E2DE44FBF9726B611BCCACC37"><enum>(C)</enum><text>casual labor not
in the course of the employer’s trade or business;</text>
</subparagraph><subparagraph id="H5E7C3B3E95684312A61832C2D25B8F88"><enum>(D)</enum><text>service performed
by an employee on or in connection with a vessel not an American vessel, or an
aircraft not an American aircraft, if the employee is employed on and in
connection with such vessel or aircraft when outside the United States;</text>
</subparagraph><subparagraph id="HA0E7D3C7269D4B4F91C23DD0B3D94685"><enum>(E)</enum><text>service performed
by a duly ordained or duly commissioned or licensed minister of any church in
the regular exercise of the minister’s ministry and service performed by a
regular member of a religious order in the exercise of duties required by such
order;</text>
</subparagraph><subparagraph id="HBE833568FE124046B265E02389FCEF46"><enum>(F)</enum><text>service performed
by an individual as an employee or employee representative as defined in
section 1 of the Railroad Retirement Act of 1937 or section 1 of the Railroad
Retirement Act of 1974;</text>
</subparagraph><subparagraph id="H9131F7ED6A6B4F92908F00B82C5D2D24"><enum>(G)</enum><text>service
performance in any calendar quarter in the employ of any organization exempt
from income tax under section 501 of the Internal Revenue Code of 1986
if—</text>
<clause id="H9354A387ACEC4B149F3DE5948DF6CCDC"><enum>(i)</enum><text>the
remuneration for such services does not exceed $150; or</text>
</clause><clause id="H7328B010600C4849A671ADED150374D6"><enum>(ii)</enum><text>such service is
in connection with the collection of dues or premiums for a fraternal
beneficiary society, order, or association, and is performed away from the home
office or is ritualistic service in connection with any such society, order, or
association; or</text>
</clause><clause id="HF32E0F42CF1F433DBBD3014D16C4514D"><enum>(iii)</enum><text>such service is
performed by a student who is enrolled and is regularly attending classes at a
school, college, or university;</text>
</clause></subparagraph><subparagraph id="H2320DB11E6F64A5A99BBEB6796A7E764"><enum>(H)</enum><text>service performed
in the employ of a foreign government (including service as a consular or other
officer or employee or a nondiplomatic representative);</text>
</subparagraph><subparagraph id="HF16C4B9D76A34AEA9BAE4EDBE061EA98"><enum>(I)</enum><text>service performed
in the employ of an instrumentality wholly owned by a foreign government,
if—</text>
<clause id="H57150B6484BF4FA797A5224B5E88931B"><enum>(i)</enum><text>the
service is of a character similar to that performed in foreign countries by
employees of the United States Government or of an instrumentality thereof;
and</text>
</clause><clause id="H8B5D23B26A514C50B6B43878DFC4E100"><enum>(ii)</enum><text>the
Secretary of State shall certify to the Secretary of Health and Human Services
that the foreign government, with respect to whose instrumentality and
employees thereof exemption is claimed, grants an equivalent exemption with
respect to similar service performed in the foreign country by employees of the
United States Government and of instrumentalities thereof; and</text>
</clause></subparagraph><subparagraph id="H3308F431CCC64978BDC73DAAFC000006"><enum>(J)</enum><text>service performed
in the employ of an international organization entitled to enjoy privileges,
exemptions, and immunities as an international organization under the
International Organizations Immunities Act.</text>
</subparagraph></paragraph><paragraph id="HB984563F088848E59203656D5C413D82"><enum>(3)</enum><text>In any case in
which an individual has received wages equal to the applicable contribution and
benefit base (as determined under section 230 of the
<act-name parsable-cite="SSA">Social Security Act</act-name>), in a calendar
year, not less than $500 of such wages shall be deemed, for the purpose of
section 104(a), to have been received by the individual in the quarter during
which the first of such wages were in fact received by the individual and in
each quarter of such calendar year thereafter.</text>
</paragraph><paragraph id="H6974ACE913C8451E91196F1DD68B242D"><enum>(4)</enum><header>Benefit
year</header><text>The term <term>benefit year</term> means a period commencing
on July 1 of any year and ending on June 30 of the succeeding year.</text>
</paragraph><paragraph id="HBB1F91CB84DC424E00DA76962E1EEF13"><enum>(5)</enum><header>Quarter</header><text>The
term <term>quarter</term> and the term <term>calendar quarter</term> mean a
period of three calendar months ending on March 31, June 30, September 30, or
December 31.</text>
</paragraph><paragraph id="H969C17C7AD0C4C9DA6C901620987FE67"><enum>(6)</enum><header>Employee</header><text>The
term <term>employee</term> includes (in addition to any individual who is a
servant under the law of master and servant) any individual who performs
service, of whatever nature, for a person, unless the service is performed by
the individual in pursuit of the individual’s own independently established
business. The term <term>employee</term> also includes an officer of a
corporation.</text>
</paragraph><paragraph id="H1BF3FCA5CC504AC6A4AA22FC66CD84AE"><enum>(7)</enum><header>American
vessel</header><text>The term <term>American vessel</term> means any vessel
documented or numbered under the laws of the United States; and includes any
vessel which is neither documented nor numbered under the laws of any foreign
country, if its crew is employed solely by one or more citizens or residents of
the United States or corporations organized under the laws of the United States
or of any State.</text>
</paragraph><paragraph id="HB4C454E2D2FA46B7909EE500F99F56FD"><enum>(8)</enum><header>American
aircraft</header><text>The term <term>American aircraft</term> means an
aircraft registered under the laws of the United States.</text>
</paragraph><paragraph id="H0E8598E6AE774B65ADDD1059B964F45D"><enum>(9)</enum><header>State</header><text>The
term <term>State</term> includes the District of Columbia.</text>
</paragraph><paragraph id="HDEC79C5AE91A41AB9725A02FDF7DBBA"><enum>(10)</enum><header>United
states</header><text>The term <term>United States</term>, when used in a
geographic sense, means the several States, as defined in paragraph (9).</text>
</paragraph><paragraph id="H080A0EB2F32A4499BF2412AFADCECF54"><enum>(11)</enum><header>Dependent</header><text>The
term <term>dependent</term> means—</text>
<subparagraph id="HFABD26575CBA45FDAD659CD202C8DCFA"><enum>(A)</enum><text>an unmarried child
(including a stepchild, adopted, or foster child) of an individual, who is
under the age of 18, or who is under a total disability which has continued for
a period of not less than six consecutive calendar months and is living with
such individual or receiving regular support from the individual;</text>
</subparagraph><subparagraph id="H066BC8A38A0A47EBB029A3DDF0F07799"><enum>(B)</enum><text>a wife of an
individual living with such individual or receiving regular support from the
individual;</text>
</subparagraph><subparagraph id="HE6C228653DC048C1BC8406578D39CD00"><enum>(C)</enum><text>a husband who is
under a total disability which has continued for a period of not less than six
consecutive calendar months, and is living with or receiving regular and
substantial support from such individual; and</text>
</subparagraph><subparagraph id="H136AA8CD8A2C4334A231CC059136AB31"><enum>(D)</enum><text>a parent who is
living with or receiving regular and substantial support from such
individual.</text>
</subparagraph></paragraph><paragraph id="H9577797346F44152BA5B8EE0EBDE15B5"><enum>(12)</enum><header>Person</header><text>The
term <term>person</term> means an individual, a trust or estate, a partnership,
a corporation, an association, a consumer cooperative, or other
organization.</text>
</paragraph></section><section id="HF58670206BBE41A98500E746153651EF"><enum>902.</enum><header>Effective
date</header><text display-inline="no-display-inline">The effective date of
this Act shall be the date of its enactment, but personal health services shall
first become available as benefits in accordance with this Act on October 1,
2010.</text>
</section><enum>X</enum><header>VALUE
ADDED TAX AND NATIONAL HEALTH CARE TRUST FUND</header>
<section id="H24B1620FCE4A434BBC00731D00EBAA19"><enum>1001.</enum><header>Imposition of
value added tax</header>
<subsection id="HDB061B1FF670413FBB426FE2F2BB0003"><enum>(a)</enum><header>In
General</header><text>Subtitle D of the Internal Revenue Code of 1986 (relating
to miscellaneous excise taxes) is amended by inserting before chapter 31 the
following new chapter:</text>
<quoted-block id="HCE894F09429040C19141ECA9B0C400F2" style="OLC">
<chapter id="HABC7FB8F73BD478FBAAFAB04168C00EC"><enum>30</enum><header>VALUE ADDED
TAX</header>
<toc regeneration="no-regeneration">
<toc-entry level="subchapter">Subchapter A. Imposition of
tax</toc-entry>
<toc-entry level="subchapter">Subchapter B. Taxable
transaction</toc-entry>
<toc-entry level="subchapter">Subchapter C. Taxable amount; rate of
tax for certain transactions; credit against tax</toc-entry>
<toc-entry level="subchapter">Subchapter D.
Administration</toc-entry>
<toc-entry level="subchapter">Subchapter E. Definitions and special
rules; treatment of certain transactions</toc-entry>
</toc>
<subchapter id="id74223FED5462471DADE316915BC469A0"><enum>A</enum><header>Imposition of
Tax</header>
<toc regeneration="no-regeneration">
<toc-entry level="section">Sec. 3901. Imposition of
tax.</toc-entry>
</toc>
<section id="H4316993302D846C0AF67EAB3BF9904FC"><enum>3901.</enum><header>Imposition of
tax</header>
<subsection id="HE0E21CF0129443DEBB003216A2174873"><enum>(a)</enum><header>General
Rule</header><text>A tax is hereby imposed on each taxable transaction.</text>
</subsection><subsection id="H673D975BB70F4080A33D719596C6BAFA"><enum>(b)</enum><header>Amount of
Tax</header><text>Except as otherwise provided in this chapter, the amount of
the tax shall be 5 percent of the taxable amount.</text>
</subsection></section></subchapter><subchapter id="HE8782043D651434CBC1039EBBABDDF1B"><enum>B</enum><header>Taxable
Transaction</header>
<toc regeneration="no-regeneration">
<toc-entry level="section">Sec. 3903. Taxable
transaction.</toc-entry>
<toc-entry level="section">Sec. 3904. Commercial-type
transaction.</toc-entry>
<toc-entry level="section">Sec. 3905. Taxable person.</toc-entry>
<toc-entry level="section">Sec. 3906. Transactions in the United
States.</toc-entry>
<toc-entry level="section">Sec. 3907. Rules relating to other terms
used in section 3903.</toc-entry>
</toc>
<section id="H491402445E8C42C39343AE656263DF66"><enum>3903.</enum><header>Taxable
transaction</header><text display-inline="no-display-inline">For purposes of
this chapter, the term <term>taxable transaction</term> means—</text>
<paragraph id="H5F70F97C013C4BAD87A20772AC65C41E"><enum>(1)</enum><text>the sale of
property in the United States,</text>
</paragraph><paragraph id="HEEFEB2EC44AF4773AFA810D3046ADCF"><enum>(2)</enum><text>the performance of
services in the United States, and</text>
</paragraph><paragraph id="HC4567AED6EE442B6BC5E40F6C502F7BD"><enum>(3)</enum><text>the importing of
property into the United States,</text>
</paragraph><continuation-text continuation-text-level="section">by a taxable
person in a commercial-type transaction.</continuation-text></section><section id="H200FB4C1D2D147E6A9995D6FD6FB4AD"><enum>3904.</enum><header>Commercial-type
transaction</header>
<subsection id="HF9BBCDA6CF4C4D37B8D9A593E86456EB"><enum>(a)</enum><header>General
Rule</header><text>For purposes of this chapter, the term <term>commercial-type
transaction</term> means a transaction engaged in by—</text>
<paragraph id="H18624DB663BC44AA98A79DD5C27B587"><enum>(1)</enum><text>a corporation,
or</text>
</paragraph><paragraph id="HFDA68A85D69E4E0596AB44F0F177032B"><enum>(2)</enum><text>any person (other
than a corporation) in connection with a business.</text>
</paragraph></subsection><subsection id="HE244C31D6BC846D6BD22145CEE918072"><enum>(b)</enum><header>Sales and Leases
of Real Property; Imports</header><text>For purposes of this chapter—</text>
<paragraph id="H9740357B7D824152B4B5C23C39C1510"><enum>(1)</enum><header>In
general</header><text>The term <term>commercial-type transaction</term>
includes—</text>
<subparagraph id="HBD7775EA795A4EF68F9174FB046BF09B"><enum>(A)</enum><text>any sale or
leasing of real property, and</text>
</subparagraph><subparagraph id="HF3458BB527B04265A800F7C8B1508E6B"><enum>(B)</enum><text>any importing of
property,</text>
</subparagraph><continuation-text continuation-text-level="paragraph">whether or
not such transaction is described in subsection (a).</continuation-text></paragraph><paragraph id="H784C8605F1384A81ACDE162E846C6E60"><enum>(2)</enum><header>Certain imported
articles</header><text>Notwithstanding paragraph (1)(B), the importing of an
article which is free of duty under part 2 of schedule 8 of the Tariff
Schedules of the United States shall not be treated as a commercial-type
transaction unless such transaction is described in subsection (a).</text>
</paragraph></subsection></section><section id="HB2B7752FF15948E995CAB2409379FE9E"><enum>3905.</enum><header>Taxable
person</header>
<subsection id="HCB350351580B4A7B94FB3DB95FA2C408"><enum>(a)</enum><header>General
Rule</header><text>Except as otherwise provided in this chapter, for purposes
of this chapter, the term <term>taxable person</term> means a person who
engages in a business or in a commercial-type transaction.</text>
</subsection><subsection id="H915CFF3B449142D1ACA81414EDE2E16"><enum>(b)</enum><header>Treatment of
Employees, etc</header><text>For purposes of this chapter, an employee shall
not be treated as a taxable person with respect to activities engaged in as an
employee.</text>
</subsection></section><section id="H654C97A260324A1890B810007BAF0001"><enum>3906.</enum><header>Transactions
in the United States</header>
<subsection id="HA6C33F64F2244622BE4FF12CC273A711"><enum>(a)</enum><header>Sales of
Property</header><text>For purposes of this chapter—</text>
<paragraph id="H8C865447304547B69D5304F70300D130"><enum>(1)</enum><header>In
general</header><text>Except as provided in paragraph (2), the sale of property
shall be treated as occurring where delivery takes place.</text>
</paragraph><paragraph id="H53CA14DD1CEC4A61BD83B32E58B1E7C4"><enum>(2)</enum><header>Real
property</header><text>The sale of real property shall be treated as occurring
where the real property is located.</text>
</paragraph></subsection><subsection id="HA60E6A08BC7A4BD38814F2727FFF2054"><enum>(b)</enum><header>Performance of
Service</header><text>For purposes of this chapter—</text>
<paragraph id="HDD72FA23FCC8411F832CD499E41740E6"><enum>(1)</enum><header>In
general</header><text>Except as otherwise provided in this subsection, a
service shall be treated as occurring where it is performed.</text>
</paragraph><paragraph id="H7059B850CD324EE083827DDD6436072"><enum>(2)</enum><header>Services
performed inside and outside the united states</header><text>If a service is
performed both inside and outside the United States, such service shall be
treated as performed—</text>
<subparagraph id="H6BEDBA0B2DAB4BB1AB5876481E669272"><enum>(A)</enum><text>inside the United
States, if 50 percent or more of such service is performed inside the United
States, and</text>
</subparagraph><subparagraph id="HE3182F001FA64737A02909BDAE23D3E6"><enum>(B)</enum><text>outside the United
States, if less than 50 percent of such service is performed inside the United
States.</text>
</subparagraph></paragraph></subsection></section><section id="H9EB640B3203F4F62BCDFF000E39D57C7"><enum>3907.</enum><header>Rules relating
to other terms used in Section <enum-in-header>3903</enum-in-header></header>
<subsection id="H1ADFC287B21B436B837B6BFDA3798160"><enum>(a)</enum><header>Exchanges
Treated as Sales</header><text>For purposes of this chapter—</text>
<paragraph id="H0BCB5B60983142F2925C548CA7A9D15"><enum>(1)</enum><text>an exchange of
property for property or services shall be treated as a sale of property,
and</text>
</paragraph><paragraph id="H08A43AB8001C4B129715425C09F6D3E5"><enum>(2)</enum><text>an exchange of
services for property or services shall be treated as the performance of
services.</text>
</paragraph></subsection><subsection id="HC35C954E648C48C3B6E1C17392D06523"><enum>(b)</enum><header>Certain
Transfers to Employees Treated as Sales</header><text>For purposes of this
chapter, the transfer of property to an employee as compensation (other than a
transfer of a type for which no amount is includible in the gross income of
employees for purposes of chapter 1) shall be treated as the sale of
property.</text>
</subsection><subsection id="H27357F2D7E824000B6B98D40D71B7B92"><enum>(c)</enum><header>Performance of
Services</header><text>For purposes of this chapter—</text>
<paragraph id="H2D52D3B702E94B45B440847DA7589E81"><enum>(1)</enum><header>Certain
activities treated as performance of services</header><text>Activities treated
as included in the performance of services shall include (but shall not be
limited to)—</text>
<subparagraph id="H81FB6D1495864E6DA83EF0008DCF5296"><enum>(A)</enum><text>permitting the use
of property,</text>
</subparagraph><subparagraph id="H941F6BA3D810476AAE6FBA734005F7AC"><enum>(B)</enum><text>the granting of a
right to the performance of services or to reimbursement (including the
granting of warranties, insurance, and similar items), and</text>
</subparagraph><subparagraph id="HF081B4E9366A4A40B773F06D3570543D"><enum>(C)</enum><text>the making of a
covenant not to compete (or similar agreement to refrain from doing
something).</text>
</subparagraph></paragraph><paragraph id="H1975E03C6B134206BBCAEAC508FC36C"><enum>(2)</enum><header>Employers and
employees</header>
<subparagraph id="HB9DD278E1B4545D68D4E74312447AE67"><enum>(A)</enum><header>Services for
employer</header><text>An employee’s services for the employee’s employer shall
not be treated as the performance of services.</text>
</subparagraph><subparagraph id="H36B68CD3269A4563B0AF02929D83DA9"><enum>(B)</enum><header>Services for
employee</header><text>An employer’s services for the employer’s employee shall
not be treated as the performance of services unless such services are of a
type which constitute gross income to the employee for purposes of chapter
1.</text>
</subparagraph></paragraph><paragraph id="H1ACEC32308A84CC18C760036A8B005ED"><enum>(3)</enum><header>Performance of
services treated as sale of services</header><text>The performance of services
shall be treated as the sale of services.</text>
</paragraph></subsection></section></subchapter><subchapter id="H0021E2DF168941F2B3A4A6C0970881FE"><enum>C</enum><header>Taxable Amount;
Rate of Tax for Certain Transactions; Credit Against Tax</header>
<toc regeneration="no-regeneration">
<toc-entry level="section">Sec. 3911. Taxable amount.</toc-entry>
<toc-entry level="section">Sec. 3912. Zero rating for food,
housing, and medical care.</toc-entry>
<toc-entry level="section">Sec. 3913. Zero rating for exports and
interest.</toc-entry>
<toc-entry level="section">Sec. 3914. Governmental
entities.</toc-entry>
<toc-entry level="section">Sec. 3915. Exempt
organizations.</toc-entry>
<toc-entry level="section">Sec. 3916. Credit against
tax.</toc-entry>
</toc>
<section id="H0BC84FBD8DC34BF3AF57C098834D5DF"><enum>3911.</enum><header>Taxable
amount</header>
<subsection id="H4143257874B240D8AFB740632053F3C5"><enum>(a)</enum><header>Amount Charged
Customer</header><text>For purposes of this chapter, the taxable amount for any
transaction for which money is the only consideration shall be the price
charged the purchaser of the property or services by the seller thereof—</text>
<paragraph id="H268DE561742344779F9D2DCFBF8CE2C4"><enum>(1)</enum><text>including all
invoiced charges for transportation, and other items payable to the seller with
respect to this transaction, but</text>
</paragraph><paragraph id="HE9F4360F45124D29ACFB8B0008AECCB"><enum>(2)</enum><text>excluding the tax
imposed by section 3901 with respect to this transaction and excluding any
State and local sales and use taxes with respect to this transaction.</text>
</paragraph></subsection><subsection id="H06EBA6F095FF494D9E3439438C474148"><enum>(b)</enum><header>Exchanges</header><text>For
purposes of this chapter, the taxable amount in any exchange of property or
services shall be the fair market value of the property or services transferred
by the person liable for the tax (determined as if such person had sold the
property or services to the other party to the exchange).</text>
</subsection><subsection id="H0FFEC8E2818445968441F3BDC9A74D92"><enum>(c)</enum><header>Imports</header><text>For
purposes of this chapter, the taxable amount in the case of any import shall
be—</text>
<paragraph id="H7F2BA3D8CFC64355872EBEDA581815D5"><enum>(1)</enum><text>the customs value
plus customs duties and any other duties which may be imposed, or</text>
</paragraph><paragraph id="HF53E4D25307848C6842D8F2BC11F6D6C"><enum>(2)</enum><text>if there is no
such customs value, the fair market value (determined as if the importer had
sold the property).</text>
</paragraph></subsection><subsection id="H5B8B551A4B26488E9972B712A1ABD836"><enum>(d)</enum><header>Special Rule in
the Case of Sales of Certain Used Consumer Goods</header><text>For purposes of
this chapter, if—</text>
<paragraph id="H6CECC3BFE839499EA1FF898D00368172"><enum>(1)</enum><text>a taxable person
acquires any tangible personal property in a transaction which was not a
taxable transaction, and</text>
</paragraph><paragraph id="H3C0432BA453F467A90731CFEBFAFFAEE"><enum>(2)</enum><text>such property had
been used by an ultimate consumer before such acquisition,</text>
</paragraph><continuation-text continuation-text-level="subsection">the
taxable amount in the case of any sale of such property by such taxable person
(determined without regard to this subsection) shall be reduced by the amount
paid for such property by such taxable person.</continuation-text></subsection></section><section id="H0528B0BD3D69432A94947F64FBFE598B"><enum>3912.</enum><header>Zero rating
for food, housing, and medical care</header>
<subsection id="H663544BF2AFA4F59A66D599C55331BF0"><enum>(a)</enum><header>Zero Rating for
Food, Housing, and Medical Care</header><text>The rate of the tax imposed by
section 3901 shall be zero with respect to the following:</text>
<paragraph id="H179702E062E54841874FAE35BA082985"><enum>(1)</enum><header>Food</header><text>The
retail sale of food and nonalcoholic beverages for human consumption (other
than consumption on the premises).</text>
</paragraph><paragraph id="H1C6907E21BE24C01B30021F834BDBA8C"><enum>(2)</enum><header>Housing</header><text>The
sale and renting of residential real property for use by the purchaser or
tenant as a principal residence.</text>
</paragraph><paragraph id="H1C44376A0FA14847A56E3826A00054A"><enum>(3)</enum><header>Medical
care</header><text>Medical care.</text>
</paragraph></subsection><subsection id="H09B929C65429434EB6BB7CF252302D71"><enum>(b)</enum><header>Definitions</header><text>For
purposes of subsection (a)—</text>
<paragraph id="H621CB91D0686494FA45B2BC627ECD91F"><enum>(1)</enum><header>Nonalcoholic
beverages</header><text>The term <term>nonalcoholic beverages</term> does not
include any article which is taxable under chapter 51.</text>
</paragraph><paragraph id="H5A72EDD3BC684B2DAC9FCE218000DD50"><enum>(2)</enum><header>Medical
care</header><text>The term <term>medical care</term> means the performance of
any service, and the retail sale of any property, payment for which by the
purchaser would constitute medical care within the meaning of section
213.</text>
</paragraph><paragraph id="H95E8F8815F234EE1BA26BE200614F1E6"><enum>(3)</enum><header>Mobile homes,
etc., treated as real property</header><text>A mobile or floating home shall be
treated as real property.</text>
</paragraph></subsection><subsection id="H79D09AD13A4B45EA995075D45624C65F"><enum>(c)</enum><header>Advance Zero
Rating</header><text>The Secretary shall prescribe regulations under which any
item which becomes clearly identifiable as an item to which subsection (a) will
apply when it reaches the retail stage shall be zero rated for all transactions
after it becomes so clearly identifiable.</text>
</subsection></section><section id="HB1F195574B93423E911956C98500BEF4"><enum>3913.</enum><header>Zero rating
for exports and interest</header><text display-inline="no-display-inline">The
rate of the tax imposed by section 3901 shall be zero with respect to the
following:</text>
<paragraph id="HFE7F2BEC1C7144E0A3386C0000483FDF"><enum>(1)</enum><header>Exports</header><text>Exports
of property.</text>
</paragraph><paragraph id="HBE5813877C6C482ABD74005E3372D556"><enum>(2)</enum><header>Interest</header><text>Interest.</text>
</paragraph></section><section id="H96B139B915CD4CAF92C93849FC572D46"><enum>3914.</enum><header>Governmental
entities</header>
<subsection id="H512E7EF2A77941FF8009E13E646517E"><enum>(a)</enum><header>Zero Rating for
Sales to Governmental Entities and Educational Activities of Governmental
Entities</header><text>The rate of the tax imposed by section 3901 shall be
zero with respect to the following:</text>
<paragraph id="HC5A24FDEDBB84824AB02B18304DF483E"><enum>(1)</enum><header>Sales to
governmental entities</header><text>Any sale of property or services to a
governmental entity.</text>
</paragraph><paragraph id="H88ABE41B05774F5A90BE1846182E37A7"><enum>(2)</enum><header>Educational
activities</header><text>The providing by a governmental entity of property and
services in connection with the education of students.</text>
</paragraph></subsection><subsection id="HDBE70BE30F4B4C95BC903285AC339496"><enum>(b)</enum><header>Sales, etc., by
Governmental Entities Taxable Only Where Separate Charge Is
Made</header><text>For purposes of this chapter, the sale of property and the
performance of services by a governmental entity shall be a taxable transaction
if (and only if) a separate charge of fee is made therefor.</text>
</subsection><subsection id="HB42B0A0E2920485B9947D17BC570093C"><enum>(c)</enum><header>Governmental
Entity Defined</header><text>For purposes of this chapter, the term
<term>governmental entity</term> means the United States, any State or
political subdivision thereof, the District of Columbia, a Commonwealth or
possession of the United States, or any agency or instrumentality of any of the
foregoing.</text>
</subsection></section><section id="H0AD1758C77A846E69020F9D85E7D008B"><enum>3915.</enum><header>Exempt
organizations</header>
<subsection id="HB0F9E9DB9A2440059E39618EBC3CB8F"><enum>(a)</enum><header>Zero Rating for
Section <enum-in-header>501(c)(3)</enum-in-header> Organizations; Credit
Allowed for All Purchases</header>
<paragraph id="HAC1472C286FD4EE890A1AD79A7B2EF82"><enum>(1)</enum><header>Zero
rating</header><text>The rate of the tax imposed by section 3901 shall be zero
with respect to any taxable transaction engaged in by a section 501(c)(3)
organization other than as part of an unrelated business.</text>
</paragraph><paragraph id="HC3E47A7CC0254E0997E3678E8B557000"><enum>(2)</enum><header>Credit allowed
for all purchases</header><text>For purposes of this chapter, a section
501(c)(3) organization shall be treated as engaged in a business with respect
to all of its activities.</text>
</paragraph></subsection><subsection id="H99D71B282E2045D000CDC874FD3FCB"><enum>(b)</enum><header>Taxable
Transactions in Case of Other Exempt Organizations</header><text>For purposes
of this chapter, the sale of property and the performance of services by any
exempt organization other than a section 501(c)(3) organization shall be a
taxable transaction if (and only if) a charge or fee is made for such
services.</text>
</subsection><subsection id="HF935B61BD6774614A1CE44D15F9438D1"><enum>(c)</enum><header>Definitions</header><text>For
purposes of this chapter—</text>
<paragraph id="H984A2311F9E241B1BADB49BF2B8FF97"><enum>(1)</enum><header>Section
<enum-in-header>501(c)(3)</enum-in-header> organizations</header><text>The term
<term>section 501(c)(3) organization</term> means an organization described in
section 501(c)(3) which is exempt from tax under section 501(a).</text>
</paragraph><paragraph id="H8E649D89EC75459C91DDD909838742D3"><enum>(2)</enum><header>Other exempt
organization</header><text>The term <term>other exempt organization</term>
means any organization (other than a section 501(c)(3) organization) which is
exempt from tax under chapter 1.</text>
</paragraph></subsection></section><section id="HB2FE14B3C9CC462DBC3386275B899723"><enum>3916.</enum><header>Credit against
tax</header>
<subsection id="H37E358DF5C1842A5924CC15960535E06"><enum>(a)</enum><header>General
Rule</header><text>There shall be allowed as a credit against the tax imposed
by section 3901 the aggregate amount of tax imposed by section 3901 which has
been paid by sellers to the taxpayer of property and services which the
taxpayer uses in the business to which the transaction relates.</text>
</subsection><subsection id="HAD3EAF01AAA74C33B38055E849F162EC"><enum>(b)</enum><header>Exempt
Transactions, etc</header><text>If—</text>
<paragraph id="HFBDBF27D0ACD4E7A95CDE5CD00A0D600"><enum>(1)</enum><text>property or
services are used partly in the business and partly for other purposes,
or</text>
</paragraph><paragraph id="H2A7C9B522C434CDDACC6FB000018AC18"><enum>(2)</enum><text>property or
services are used partly for taxable transactions and partly for other
transactions,</text>
</paragraph><continuation-text continuation-text-level="subsection">the
credit shall be allowable only with respect to the property and services used
for taxable transactions in the business. No credit shall be allowable for any
transaction occurring when the taxpayer was a nontaxable person.</continuation-text></subsection><subsection id="H51C62D339C7A43AF8729B2955EC2F3B1"><enum>(c)</enum><header>Excess Credit
Treated as Overpayment</header>
<paragraph id="H44C690D8AE894258AB60033763C82613"><enum>(1)</enum><header>In
general</header><text>If for any taxable period the aggregate amount of the
credits allowable by subsection (a) exceeds the aggregate amount of the tax
imposed by section 3901 for such period, such excess shall be treated as an
overpayment of the tax imposed by section 3901.</text>
</paragraph><paragraph id="H3AFDD661B2664B8BBBD06E51F58D46F4"><enum>(2)</enum><header>Time when
overpayment arises</header><text>Any overpayment under paragraph (1) for any
taxable period shall be treated as arising on the later of—</text>
<subparagraph id="HBD66368B9B664E0BA2D9257325D0E988"><enum>(A)</enum><text>the due date for
the return for such period, or</text>
</subparagraph><subparagraph id="H32B6F3315B7C40E0B3D40051EB98349E"><enum>(B)</enum><text>the date on which
the return is filed.</text>
</subparagraph></paragraph></subsection></section></subchapter><subchapter id="HA19E8658044A48EE99C67E3865E2C7D5"><enum>D</enum><header>Administration</header>
<toc regeneration="no-regeneration">
<toc-entry level="section">Sec. 3921. Seller liable for
tax.</toc-entry>
<toc-entry level="section">Sec. 3922. Tax invoices.</toc-entry>
<toc-entry level="section">Sec. 3923. De minimis
exemption.</toc-entry>
<toc-entry level="section">Sec. 3924. Time for filing return and
claiming credit; deposits of tax.</toc-entry>
<toc-entry level="section">Sec. 3925. Treatment of related
businesses, etc.</toc-entry>
<toc-entry level="section">Sec. 3926. Secretary to be notified of
certain events.</toc-entry>
<toc-entry level="section">Sec. 3927. Regulations.</toc-entry>
</toc>
<section id="HB9E341A187E84F09AB5534BE1AA8DA"><enum>3921.</enum><header>Seller liable
for tax</header><text display-inline="no-display-inline">The person selling the
property or services shall be liable for the tax imposed by section
3901.</text>
</section><section id="H4201E4FAFAA3485BA08BF03F83061455"><enum>3922.</enum><header>Tax
invoices</header>
<subsection id="HCA9D9E093512443EA731B330F900CD6E"><enum>(a)</enum><header>Seller Must Give
Purchaser Tax Invoice</header><text>Any taxable person engaging in a taxable
transaction shall give the purchaser a tax invoice with respect to such
transaction if the seller has reason to believe that the purchaser is a taxable
person.</text>
</subsection><subsection id="H7336B7619C6642D090698767D0278F45"><enum>(b)</enum><header>Content of
Invoice</header><text>The tax invoice required by subsection (a) with respect
to any transaction shall set forth—</text>
<paragraph id="H22D1D20141CD4D8FBFE86FC68F08AA43"><enum>(1)</enum><text>the name and
identification number of the seller,</text>
</paragraph><paragraph id="H164CFDB9146C4810A96EC4D28300B204"><enum>(2)</enum><text>the name of the
purchaser,</text>
</paragraph><paragraph id="H22E1280CC9D24C7394C200107704B6C8"><enum>(3)</enum><text>the amount of the
tax imposed by section 3901, and</text>
</paragraph><paragraph id="H5DEDCD037C394799A5DC8BD4D7334509"><enum>(4)</enum><text>such other
information as may be prescribed by regulations.</text>
</paragraph></subsection><subsection id="H98A22C118517459DB2CCC4C72C0049D8"><enum>(c)</enum><header>No Credit
Without Invoice</header>
<paragraph id="H4C09548BFE7A49959E205E4DC190E66"><enum>(1)</enum><header>In
general</header><text>Except as provided in paragraphs (2) and (3), a purchaser
may claim a credit with respect to a transaction only if the purchaser—</text>
<subparagraph id="H35BB385C8A0546AA845392D8923ECBD1"><enum>(A)</enum><text>has received from
the seller and has in the purchaser’s possession a tax invoice which meets the
requirements of subsection (b), and</text>
</subparagraph><subparagraph id="HA225803396F740C980BB945718C70953"><enum>(B)</enum><text>is named as the
purchaser in such invoice.</text>
</subparagraph></paragraph><paragraph id="H3CEB3EEA85954FDFB3C30090E2F8FE42"><enum>(2)</enum><header>Employees or
other agents named in invoices</header><text>To the extent provided in
regulations, the naming of an employee or other agent of the purchaser shall be
treated as the naming of the purchaser.</text>
</paragraph><paragraph id="H879916DB793F49DFAB475F5C902E3EBF"><enum>(3)</enum><header>Waiver of
invoice requirement in certain cases</header><text>To the extent provided in
regulations, paragraph (1) shall not apply—</text>
<subparagraph id="H756DABAF84FD4FFEB620F11D6C3D2FE7"><enum>(A)</enum><text>where the
purchaser without fault on the purchaser’s part fails to receive or fails to
have in the purchaser’s possession a tax invoice,</text>
</subparagraph><subparagraph id="HD45EB2A4DA6C4396986BD673F81EB74B"><enum>(B)</enum><text>to a taxable
transaction (or category of transactions) where—</text>
<clause id="HBD64493A789A43DDA81ED4BC4DD6AC71"><enum>(i)</enum><text>the amount
involved is de minimis, or</text>
</clause><clause id="HB58566A6528A4983803DDB931D839984"><enum>(ii)</enum><text>the information
required by subsection (b) can be reliably established by sampling or by
another method and can be adequately documented.</text>
</clause></subparagraph></paragraph></subsection><subsection id="H8FD37273A3264711A56BA6A7EED758D6"><enum>(d)</enum><header>Time for
Furnishing Invoice</header><text>Any invoice required to be furnished by
subsection (a) with respect to any transaction shall be furnished not later
than 15 business days after the tax point for such transaction.</text>
</subsection></section><section id="HC590B3A6FD31433BAF598434001B37A6"><enum>3923.</enum><header>De minimis
exemption</header>
<subsection id="HF11701541D704EECAF11E9D8E8F8ADA3"><enum>(a)</enum><header>In
General</header><text>Under regulations, a person—</text>
<paragraph id="H501BBDFB55B04B71AB8D8B29F4ECBE71"><enum>(1)</enum><text>whose aggregate
taxable transactions for the calendar year do not exceed $20,000, and</text>
</paragraph><paragraph id="HC6E4289D5C3C4348B68E3516AB9CF6EF"><enum>(2)</enum><text>whose aggregate
taxable transactions for the next calendar year can reasonably be expected not
to exceed $20,000,</text>
</paragraph><continuation-text continuation-text-level="subsection">may elect
to be treated as a person who is not a taxable person for the next calendar
year.</continuation-text></subsection><subsection id="H8F6D946947D74070802C2708F71D002C"><enum>(b)</enum><header>Exceptions</header><text>Subsection
(a) shall not apply—</text>
<paragraph id="H471FD0FA84334880A269EE6FCF7DCF85"><enum>(1)</enum><text>to any sale or
leasing of real property, and</text>
</paragraph><paragraph id="H246FF3F932314D1987AA77AE1500461F"><enum>(2)</enum><text>to any importing
of property.</text>
</paragraph></subsection><subsection id="HD64998A2A3644EF400AAF677ECD4A7D5"><enum>(c)</enum><header>Termination of
Election</header><text>Any election under subsection (a) for a calendar year
shall terminate if the aggregate taxable transactions—</text>
<paragraph id="H9E056680189D42B19561450704984829"><enum>(1)</enum><text>for the first
calendar quarter in such year exceed $7,000,</text>
</paragraph><paragraph id="H8D1B1B507B034C7585A76B164968E2FB"><enum>(2)</enum><text>for the first 2
calendar quarters in such year exceed $12,000, or</text>
</paragraph><paragraph id="HDE1D61DFAD564DD7BA4EF1EB0490CAA2"><enum>(3)</enum><text>for the first 3
calendar quarters in such year exceed $17,000.</text>
</paragraph><continuation-text continuation-text-level="subsection">Such
termination shall take effect on the first day of the second month following
the close of the first period in which the requirements of paragraph (1), (2),
or (3) are met.</continuation-text></subsection><subsection id="H6F9D907EB01443E29035F9CE4899512B"><enum>(d)</enum><header>Taxable Amount
Treated as Zero for Zero-Rated Transactions</header><text>For purposes of this
section, the taxable amount of any zero-rated transaction shall be treated as
zero.</text>
</subsection><subsection id="H0C5028F6D5AA4C94B3B1EF4C4574FCA9"><enum>(e)</enum><header>Condition of
Election</header><text>In the case of a person who is a taxable person for any
period, an election under subsection (a) may be made for succeeding periods
only with the consent of the Secretary. Such consent shall be conditioned on
placing such person, for all succeeding periods, in the same position with
respect to the tax imposed by section 3901 (and the credit allowed by section
3916) he would have been in if all property and services he holds at the time
he becomes a nontaxable person had been acquired as a nontaxable person.</text>
</subsection><subsection id="HE237BC8ECB754E3AA380081CB5D5DF00"><enum>(f)</enum><header>Casual Sales and
Leases of Real Property Excluded</header><text>For purposes of this section,
the term <term>taxable transaction</term> does not include a transaction which
is treated as a commercial-type transaction solely by reason of section
3904(b)(1)(A).</text>
</subsection></section><section id="H29B5DCD713E14EFEAFCFAFACA9502473"><enum>3924.</enum><header>Time for
filing return and claiming credit; deposits of tax</header>
<subsection id="H58060EDA6C8A492AA6AB26DA2CE8CFE8"><enum>(a)</enum><header>Filing
Return</header><text>Before the first day of the second calendar month
beginning after the close of each taxable period, each taxable person shall
file a return of the tax imposed by section 3901 on taxable transactions having
a tax point within such taxable period.</text>
</subsection><subsection id="H46A6E40F54ED4F41842BCF2F64273926"><enum>(b)</enum><header>Credit Allowed
for Taxable Period in Which Purchaser Receives Invoice</header>
<paragraph id="H9EEE1F31B8A641E58BD3762960909728"><enum>(1)</enum><header>In
general</header><text>Except as provided in paragraph (2), a credit allowable
by section 3916 with respect to a transaction may be allowed only for the first
taxable period by the close of which the taxpayer—</text>
<subparagraph id="H4BD338CBCFE44B3F8C3B79C1828CB66D"><enum>(A)</enum><text>has paid or
accrued amounts properly allocable to the tax imposed by section 3901 with
respect to such transaction, and</text>
</subparagraph><subparagraph id="HCEF28472E22C458F00542300A2E92BC"><enum>(B)</enum><text>has a tax invoice
(or equivalent) with respect to such transaction.</text>
</subparagraph></paragraph><paragraph id="H5C5AA9185A954B1F98DDE685F5A022BC"><enum>(2)</enum><header>Use for later
period</header><text>Under regulations, a credit allowable by section 3916 may
be allowed for a period after the period set forth in paragraph (1).</text>
</paragraph></subsection><subsection id="H0C7C9CE25D5F4428B4AF29D5BD6BC8F0"><enum>(c)</enum><header>Taxable
Period</header><text>For purposes of this chapter—</text>
<paragraph id="H4F6AEE2231CE4337BD9573118133E1A9"><enum>(1)</enum><header>In
general</header><text>The term <term>taxable period</term> means a calendar
quarter.</text>
</paragraph><paragraph id="H1DF3F968D17B4724837B73AAE1E315FE"><enum>(2)</enum><header>Exception</header>
<subparagraph id="H5F133D36DF3B4C7D8C4904BA49B574F9"><enum>(A)</enum><header>Election of
1-month period</header><text>If the taxpayer so elects, the term <term>taxable
period</term> means a calendar month.</text>
</subparagraph><subparagraph id="HE0620D6EFF584DA086D89B51EDE23F92"><enum>(B)</enum><header>Other
periods</header><text>To the extent provided in regulations, the term
<term>taxable period</term> includes a period, other than a calendar quarter or
month, selected by the taxpayer.</text>
</subparagraph></paragraph></subsection><subsection id="HB6A01E6F7D4D434FB25922008FCA4F93"><enum>(d)</enum><header>Tax
Point</header><text>For purposes of this chapter—</text>
<paragraph id="HE5ADC68F15A34DECBBC39842BF52B8C8"><enum>(1)</enum><header>Chapter
<enum-in-header>1</enum-in-header> rules with respect to seller
govern</header><text>Except as provided in paragraph (2), the tax point for any
sale of property or services is the earlier of—</text>
<subparagraph id="HC04CF3E12B0C4FD2A6A05F138FE76881"><enum>(A)</enum><text>the time (or
times) when any income from the sale should be treated by the seller as
received or accrued (or any loss should be taken into account by the seller)
for purposes of chapter 1, or</text>
</subparagraph><subparagraph id="H72B45B447BB241519E655DD1285856AC"><enum>(B)</enum><text>the time (or
times) when the seller receives payment for the sale.</text>
</subparagraph></paragraph><paragraph id="H0E7B13F0834440D4AAE139960095E6F7"><enum>(2)</enum><header>Imports</header><text>In
the case of the importing of property, the tax point is when the property is
entered, or withdrawn from warehouse, for consumption in the United
States.</text>
</paragraph></subsection><subsection id="H81C30DD15A5F44B58129CCC570450094"><enum>(e)</enum><header>Monthly Deposits
Required</header><text>To the extent provided in regulations, monthly deposits
may be required of the estimated liability for any taxable period for the tax
imposed by section 3901.</text>
</subsection></section><section id="H87563A07F654498EBFBF840072EB00"><enum>3925.</enum><header>Treatment of
related businesses, etc</header>
<subsection id="H712630EA85F6419382FADFC19811BFA4"><enum>(a)</enum><header>General
Rule</header><text>For purposes of this chapter (other than section 3923), to
the extent provided in regulations, the taxpayer may elect—</text>
<paragraph id="H61751C9A77344AF3A80061254CA0F0B7"><enum>(1)</enum><text>to treat as 1
taxable person 2 or more businesses which may be treated under section 52(b) as
1 employer, and</text>
</paragraph><paragraph id="H5D0D952CE9574B0D88678292F460AEF"><enum>(2)</enum><text>to treat as
separate taxable persons separate divisions of the same business.</text>
</paragraph></subsection><subsection id="HDDA17A0E7B45432CAB001600FF870449"><enum>(b)</enum><header>De Minimis
Exemption</header><text>For purposes of section 3923, all businesses which are
under common control (within the meaning of section 52(b)) shall be treated as
1 business.</text>
</subsection></section><section id="H50D789C08EF149BF89C947429B3B77E7"><enum>3926.</enum><header>Secretary to
be notified of certain events</header><text display-inline="no-display-inline">To the extent provided in regulations, each
person engaged in a business shall notify the Secretary (at such time or times
as may be prescribed by such regulations) of any change in the form in which a
business is conducted or any other change which might affect the liability for
the tax imposed by section 3901 or the amount of such tax or any credit against
such tax, or otherwise affect the administration of such tax in the case of
such person.</text>
</section><section id="H30596EE46391452384A3E69D10070084"><enum>3927.</enum><header>Regulations</header><text display-inline="no-display-inline">The Secretary shall prescribe such
regulations as may be necessary to carry out the purposes of this
chapter.</text>
</section></subchapter><subchapter id="H95A02BC88A06449E977E1C09C81866BC"><enum>E</enum><header>Definitions and
Special Rules; Treatment of Certain Transactions</header>
<toc regeneration="no-regeneration">
<toc-entry level="section">Sec. 3931. Definitions.</toc-entry>
<toc-entry level="section">Sec. 3932. Special rules.</toc-entry>
<toc-entry level="section">Sec. 3933. Personal use by owner of
business property or services.</toc-entry>
<toc-entry level="section">Sec. 3934. Gift of business property or
services.</toc-entry>
<toc-entry level="section">Sec. 3935. Special rules for
dispositions of nonbusiness real property.</toc-entry>
<toc-entry level="section">Sec. 3936. Special rule for insurance
contracts.</toc-entry>
</toc>
<section id="HE51F56B745AD449D91DCDDD7ABC70014"><enum>3931.</enum><header>Definitions</header>
<subsection id="HB40622CD912F41589BF9E963D948FEFD"><enum>(a)</enum><header>Property</header><text>For
purposes of this chapter, the term <term>property</term> means any tangible
property.</text>
</subsection><subsection id="H4D5D6B8B67D54059A6789DC76ED4EC0"><enum>(b)</enum><header>Business</header><text>For
purposes of this chapter, the term <term>business</term> includes—</text>
<paragraph id="H47AB065D61904371ACFC4E00BD8E7316"><enum>(1)</enum><text>a trade,
and</text>
</paragraph><paragraph id="HD1C1F138BD0A4FDEB2222457F5FCE003"><enum>(2)</enum><text>an activity
regularly carried on for profit.</text>
</paragraph></subsection><subsection id="H7AB5D03BE4E04A0AA59C55506EA6D8C5"><enum>(c)</enum><header>Employee</header><text>For
purposes of this chapter, the term <term>employee</term> has the meaning such
term has for purposes of chapter 24 (relating to withholding).</text>
</subsection><subsection id="H816517D2FC05451D878EF2B6C2F06E34"><enum>(d)</enum><header>Person</header><text>For
purposes of this chapter, the term <term>person</term> includes any
governmental entity.</text>
</subsection><subsection id="H8BD1A42359F3432587B03DA43437E24B"><enum>(e)</enum><header>Business
Day</header><text>For purposes of this chapter, the term <term>business
day</term> means any day other than Saturday and Sunday and other than a legal
holiday (within the meaning of section 7503).</text>
</subsection><subsection id="HA9CCA44AA0AC40C6AB002B43FA555100"><enum>(f)</enum><header>United
States</header><text>For purposes of this chapter, the term <term>United
States</term>, when used in a geographical sense, includes a Commonwealth and
any possession of the United States.</text>
</subsection></section><section id="HE52BB2ADB0054E61BEA87267733503F7"><enum>3932.</enum><header>Special
rules</header>
<subsection id="H60B33E02DEEC48028D432E67D4E8A9D1"><enum>(a)</enum><header>Coordination
With Subtitle <enum-in-header>A</enum-in-header></header><text>For purposes of
subtitle A—</text>
<paragraph id="H36C0CDFDC0D94AF382CED14F70B832CA"><enum>(1)</enum><header>Treatment of
credit</header><text>Any credit allowable to a taxpayer under section 3916
which is attributable to any property or services shall be treated as a
reduction in the amount paid or incurred by the taxpayer for such property or
services.</text>
</paragraph><paragraph id="H952EED3778BB4363A4A12513E197664"><enum>(2)</enum><header>Amount of
deduction for tax</header><text>The amount allowable as a deduction for the tax
imposed by section 3901 shall be determined without regard to any credit
allowable under section 3916.</text>
</paragraph><paragraph id="H7CC811DD671E4FBDABEA91CF2F1F88A"><enum>(3)</enum><header>Computation of
percentage depletion</header><text>For purposes of sections 613 and
613A—</text>
<subparagraph id="HF2374DEC377E471C80BB567778FCF04C"><enum>(A)</enum><text>gross income shall
be reduced by the amount of the tax imposed by section 3901, and</text>
</subparagraph><subparagraph id="H9D48437C2F824A3BB78C620057ACCF57"><enum>(B)</enum><text>taxable income
shall be determined without regard to any deduction allowed for such
tax.</text>
</subparagraph></paragraph></subsection><subsection id="HB1EFD380054746F99CD464C42436B34C"><enum>(b)</enum><header>Special Rule
Sale of Property Includes Incidental Performance of Services</header><text>For
purposes of this chapter, if in connection with the sale of any property there
is an incidental performance of services, such performance of services shall be
treated as part of the sale of such property.</text>
</subsection><subsection id="H7B97DEE8B3144AE491AF4E252DCBF205"><enum>(c)</enum><header>Special Rule
Where Performance of Services Includes Incidental Transfer of
Property</header><text>For purposes of this chapter, if in connection with the
performance of any services there is an incidental transfer of property, such
transfer shall be treated as part of the performance of such services.</text>
</subsection><subsection id="HB273ADE5A547455785099D9600D2E8D"><enum>(d)</enum><header>Authority to Zero
Rate De Minimis Transactions, etc</header><text>The Secretary may prescribe
regulations providing that the rate of tax shall be zero for a taxable
transaction (or category of such transactions) where—</text>
<paragraph id="H0F15239E3DF3400CBB5D00D6B83B9B5B"><enum>(1)</enum><text>the amount
involved is de minimis, or</text>
</paragraph><paragraph id="H4D12FB90C1994D1C9C8482BFE8D2C5EE"><enum>(2)</enum><text>the revenue raised
by taxing the transaction is not sufficient to justify the administrative and
other costs involved in the payment and collection of the tax.</text>
</paragraph></subsection><subsection id="HCDD6EDD05A9F465E81A4EC846E7B0550"><enum>(e)</enum><header>Importing
Treated as Sale and Purchase</header><text>For purposes of this chapter, the
importing of any property into the United States shall be treated as both a
sale and purchase of such property by the person importing such
property.</text>
</subsection><subsection id="H8AA0D694BD7A4EB581446DCBFF78DC6"><enum>(f)</enum><header>Subchapter
<enum-in-header>S</enum-in-header> Corporation Treated as Not a
Corporation</header><text>For purposes of this chapter, an S corporation (as
defined in section 1361(a)) shall be treated as a person which is not a
corporation.</text>
</subsection><subsection id="HFC5356AF243040AE80619BC0C839BEA8"><enum>(g)</enum><header>Use Includes
Held for Use</header><text>For purposes of this chapter, property and services
held for use by any person shall be treated as used by the person.</text>
</subsection></section><section id="H543A22B1E9C84E1389CD2E63FABA1719"><enum>3933.</enum><header>Personal use
by owner of business property or services</header>
<subsection id="H3E7052F62FFE4690803B825DD2CDE783"><enum>(a)</enum><header>General
Rule</header><text>If any business property or services are used by an owner of
the taxpayer for personal purposes, for purposes of this chapter such use shall
be treated as a taxable transaction.</text>
</subsection><subsection id="H1F523AB98999491AB0F428711C939EED"><enum>(b)</enum><header>Taxable
Amount</header><text>In the case of a use described in subsection (a), for
purposes of this chapter, the taxable amount shall be—</text>
<paragraph id="H0114DA5CACB9406A9E720490CE2978B9"><enum>(1)</enum><text>except as provided
in paragraph (2), the fair market value of the property or the services,
or</text>
</paragraph><paragraph id="HC00FAA765AD34AF58943F1A2C1C57BFE"><enum>(2)</enum><text>if such use is
only the temporary use of property, the fair rental value of such use.</text>
</paragraph></subsection><subsection id="H5ADC82266843427D9E14D1CDB9BC6EB"><enum>(c)</enum><header>Definitions</header><text>For
purposes of this section—</text>
<paragraph id="H125638D838974DBF98ECC26546B5F5AD"><enum>(1)</enum><header>Business
property or services</header><text>The term <term>business property or
services</term> means any property or services if a sale of such property, or
the performance of such services, by the taxpayer would be a taxable
transaction.</text>
</paragraph><paragraph id="HAD52295B10B74255998067E95CFDEF36"><enum>(2)</enum><header>Owner</header><text>The
term <term>owner</term> means—</text>
<subparagraph id="HD93B29CBFE3F4611B260D0295200D258"><enum>(A)</enum><text>in the case of a
sole proprietorship, the proprietor,</text>
</subparagraph><subparagraph id="HCB5CFAFEC2CF4004B38CFB890032B187"><enum>(B)</enum><text>in the case of any
other business enterprise, any holder of a beneficial interest in the
corporation, partnership, or other entity, and</text>
</subparagraph><subparagraph id="H2BCB3D2FA5894D0483FC2B602F2072EA"><enum>(C)</enum><text>any member of the
family (within the meaning of section 267(c)(4)) of an individual described in
subparagraph (A) or (B).</text>
</subparagraph></paragraph></subsection></section><section id="HFAFECEA9E3F84B67B7EEA37DE8B827C"><enum>3934.</enum><header>Gift of
business property or services</header>
<subsection id="H19516010F39B4C0900701DB33C37009C"><enum>(a)</enum><header>General
Rule</header><text>In the case of any gift of business property or services,
for purposes of this chapter—</text>
<paragraph id="H3183FC1C7BBA42DCBAC6BECE53CB00"><enum>(1)</enum><text>such gift shall be
treated as a taxable transaction, and</text>
</paragraph><paragraph id="HB43CAB931D7A4B719064CB7BECBD694E"><enum>(2)</enum><text>the taxable amount
shall be the amount determined under section 3933(b).</text>
</paragraph></subsection><subsection id="H056DB03883E14FD8B6EF2631EC5B842"><enum>(b)</enum><header>Gifts Related to
Business Promotion Activities</header><text>For purposes of subsection (a), the
term <term>gift</term> includes any gift of property or services transferred in
connection with business promotion activities.</text>
</subsection></section><section id="HA76E078E743748BD9404BA4CE38C5791"><enum>3935.</enum><header>Special rules
for dispositions of nonbusiness real property</header>
<subsection id="HEFA4DD0E45AD48778247983D344DD137"><enum>(a)</enum><header>In
General</header><text>In the case of any sale of real property which is treated
as a commercial-type transaction solely by reason of section 3904(b)(1)(A), for
purposes of this chapter, the taxable amount shall be the excess (if any)
of—</text>
<paragraph id="H8131E4BBBF414C1FB693C342E706A9D1"><enum>(1)</enum><text>the amount
realized on such sale, over</text>
</paragraph><paragraph id="HC62EB681427C4BDA99DF1E0013F6E09E"><enum>(2)</enum><text>the adjusted cost
to the taxpayer of such real property.</text>
</paragraph></subsection><subsection id="H7F0FBE0FE5DA44A8B812539DA58FA6D"><enum>(b)</enum><header>Adjusted
Cost</header><text>For purposes of subsection (a)—</text>
<paragraph id="H0FDB7967EE4C4E8D8600E5A12F8B48DD"><enum>(1)</enum><header>In
general</header><text>Except as provided in paragraph (2), the term
<term>adjusted cost</term> means, with respect to any property, the basis of
such property increased by expenditures properly chargeable to capital account
(other than taxes or other carrying charges described in section 266) for
periods during the holding period for such property.</text>
</paragraph><paragraph id="H4ACB549950F14D5986D496E853AB4259"><enum>(2)</enum><header>Transitional
rule</header><text>The adjusted cost of any property shall include only amounts
incurred during periods after December 31, 2009.</text>
</paragraph></subsection><subsection id="HB4702507AD784E1CA921AF6FB0988961"><enum>(c)</enum><header>Value Added Tax
Not Taken Into Account</header><text>For purposes of this section, the amount
realized on any sale of real property shall not include any amount attributable
to the tax imposed by this chapter.</text>
</subsection></section><section id="HF10A6F5271F349229D962CE9C471EBA0"><enum>3936.</enum><header>Special rule
for insurance contracts</header><text display-inline="no-display-inline">In the
case of any contract of insurance, for purposes of this chapter, the taxable
amount is the excess of—</text>
<paragraph id="H4A04221A0A0C46A089B523147F57913F"><enum>(1)</enum><text>the portion of the
premium attributable to insurance coverage, over</text>
</paragraph><paragraph id="H5960E088B57A4845A2B8257E26A63C9D"><enum>(2)</enum><text>the actuarial cost
to the insurer of providing such insurance
coverage.</text>
</paragraph></section></subchapter></chapter><after-quoted-block></after-quoted-block></quoted-block>
</subsection><subsection id="H93000E444AC84048B82382AF9E00CC06"><enum>(b)</enum><header>Clerical
Amendment</header><text>The table of chapters for subtitle D of the Internal
Revenue Code of 1986 is amended by inserting before the item relating to
chapter 31 the following:</text>
<quoted-block id="HA3CDCC5E1F934EA39E14CF779D4B5704" style="OLC">
<toc regeneration="no-regeneration">
<toc-entry level="chapter">Chapter 30. Value added
tax</toc-entry>
</toc>
<after-quoted-block></after-quoted-block></quoted-block>
</subsection><subsection id="H411F4DCE29C448F1B20620C6233F2827"><enum>(c)</enum><header>Effective
Date</header><text>The amendments made by this section shall apply to
transactions occurring after December 31, 2009.</text>
</subsection></section><section id="HEF293CA6C3864F4AA65C1865C8F8236D"><enum>1002.</enum><header>Revenue from
value added tax to fund National Health Care Trust Fund</header>
<subsection id="HB8D6241C299B41EBBEA67700C91D9DF"><enum>(a)</enum><header>In
General</header><text>Subchapter A of chapter 98 of the Internal Revenue Code
of 1986 (relating to trust fund code) is amended by adding at the end the
following new section:</text>
<quoted-block id="H123302F879C44E46B96E6F9C707FF304" style="OLC">
<section id="H488C4795F130478185BBEF65481B72FF"><enum>9511.</enum><header>National
Health Care Trust Fund</header>
<subsection id="H66065F96EAF04F0A84009960B92E4510"><enum>(a)</enum><header>Creation of
Trust Fund</header><text>There is established in the Treasury of the United
States a trust fund to be known as the <quote>National Health Care Trust
Fund</quote>, consisting of such amounts as may be appropriated or credited to
the Trust Fund as provided in this section or section 9602(b).</text>
</subsection><subsection id="HA1258BE34B48474B924D5590759B1CA9"><enum>(b)</enum><header>Transfers to
Trust Fund</header><text>There are hereby appropriated to the National Health
Care Trust Fund amounts equivalent to amounts received in the Treasury from the
tax imposed under section 3901 (relating to the value added tax).</text>
</subsection><subsection id="H1617D00B62444790A1917FCBB9810068"><enum>(c)</enum><header>Expenditures
From Trust Fund</header><text>Amounts in the National Health Care Trust Fund
shall be available only for purposes of making expenditures to carry out the
program of health benefits under the National Health Insurance
Act.</text>
</subsection></section><after-quoted-block>.</after-quoted-block></quoted-block>
</subsection><subsection id="HF8190102C6CA43BB9037B09FAEFAD85"><enum>(b)</enum><header>Clerical
Amendment</header><text>The table of sections for such subchapter A is amended
by adding at the end the following new item:</text>
<quoted-block id="HC0AC7B529D4141D6A4F38CFFEFCE8260" style="OLC">
<toc regeneration="no-regeneration">
<toc-entry level="section">Sec. 9511. National Health Care Trust
Fund.</toc-entry>
</toc>
<after-quoted-block>.</after-quoted-block></quoted-block>
</subsection></section><enum>XI</enum><header>STUDY AND
DEVELOPMENT OF COST CONTROL MECHANISMS</header>
<section id="HD49A584F6AD64EF58B4E66E5CB4F8BD6"><enum>1101.</enum><header>Development of
cost control mechanisms</header>
<subsection id="H5AC444940CA34B7EAF463B03FA18633B"><enum>(a)</enum><header>Study</header><text>The
Secretary of Health and Human Services shall conduct a study analyzing various
methods to control the costs of providing personal health benefits under this
Act, and shall include in such study an analysis of the effects on such costs
of medical malpractice claims and the purchase of medical malpractice liability
insurance by providers of the benefits.</text>
</subsection><subsection id="HC3A21B47003C45348203A9554305C28B"><enum>(b)</enum><header>Reports to
Congress</header><text>Not later than October 1, 2011, the Secretary shall
submit a report to Congress describing the study conducted under subsection
(a), and shall include in the report recommendations on methods to control
costs under this Act, including recommendations on the development of a system
under which medical malpractice claims brought against providers of benefits
under this Act may be resolved in an equitable and cost-effective manner. Not
later than April 1, 2012, the Secretary shall promulgate regulations to
implement the recommendations made in the report.</text>
</subsection></section>