[Congressional Record Volume 141, Number 20 (Wednesday, February 1, 1995)]
[Senate]
[Pages S1920-S1944]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]


          STATEMENTS ON INTRODUCED BILLS AND JOINT RESOLUTIONS

      By Mr. GRAHAM (for himself and Mr. Hatfield):
  S. 308. A bill to increase access to, control the costs associated 
with, and improve the quality of health care in States through health 
insurance reform, State innovation, public health, medical research, 
and reduction of fraud and abuse, and for other purposes; to the 
Committee on Finance.


                       the health partnership act

  Mr. GRAHAM. Mr. President, many people count the death of health care 
reform as being in 1994, when the Congress failed to adopt the 
proposals that had been adopted as submitted by the 
[[Page S1921]] President, by various factions within the Congress 
itself, by some groups that were external to the Congress. I personally 
think that is the wrong date for the death of health care reform in 
America. I believe the appropriate date for health care reform's demise 
occurred 20 years earlier, in 1974.
  Prior to 1974 we in fact had a very vibrant, innovative, creative set 
of health care reform initiatives. They all had one principal 
characteristic, they were emerging from the States. We had a 
decentralized federalized system of health care innovation.
  The State of the Presiding Officer was one of those States involved 
in those early efforts of health care reform, as was my State and the 
State of Oregon, the State of our colleague, Senator Hatfield. Maybe 
the best known example of those innovations that occurred prior to 1974 
was the State of Hawaii.
  The State of Hawaii set some objectives in terms of increasing the 
percentage of its population covered, to reduce the cost of health 
care, and to focus attention on the prevention of illness rather than 
crisis intervention. Hawaii, as an example, has achieved almost all the 
objectives that were established two decades ago.
  But in 1974 the Congress began to restrict the capacity of States to 
serve as the laboratories for health care innovation through 
restrictions on the ability of States to secure waivers from Federal 
laws such as Medicaid, the health care program for indigent Americans, 
and the restrictions on the States' ability to innovate as it related 
to persons who secured their insurance through a place of employment, 
the so-called ERISA restraints. States, for 20 years, have largely been 
restricted from their role of serving as centers of innovation, of 
field-based experience on what would actually work in terms of 
improving the health of Americans.
  The legislation we are going to introduce today seeks to reverse that 
20-year period of sterility. As Supreme Court Justice Louis Brandeis 
once said,

       It is one of the happy incidents of the Federal system that 
     a single, courageous State may, if its citizens choose, serve 
     as a laboratory and try novel social and economic experiments 
     without risk to the rest of the country.

  We propose to restore that opportunity of States to serve as that 
novel laboratory to try things to see if they work; if they do, to 
enlarge them; if they do not, to discard them--but not put the entire 
Nation at risk as we experiment with new approaches to achieve the 
objective of better health for all Americans.
  There are some principles behind the bill that Senator Hatfield and I 
will introduce, and those principles include the concept of 
incrementalism. Incrementalism is not just a synonym for drift and 
indecision that you move willy-nilly from one step to the other. 
Incrementalism infers that you have a clear set of goals, destinations, 
and then you understand the steps that are required to get from where 
you are to that destination.
  While these goals can be defined with greater specificity--and they 
shall be--the basic goals that we seek
 to attain with this legislation are:

  First, to increase the access of Americans to health care services;
  Second, to contain the level of increase of the cost of health care 
services;
  Three, to reduce the incidence of illness and disease by a greater 
investment in those things that we know will tend to maintain a state 
of good health.
  A second principle of our proposal is decentralization. One of the 
common elements of all of the health care legislation considered in 
1994, no matter how much they differed in specifics, is that they all 
shared one thing in common; that is, they assume that the solution to 
health care was a centralized solution. There was an assumption that 
health care can be dealt with by one-suit-fits-all approach.
  Senator Hatfield and I believe that is fundamentally flawed--that in 
a Nation that is as large and diverse as the United States of America 
the attempt to have a central health care system for all of our almost 
260 million citizens is an inherent prescription for failure. The 
differences just between let us say a State such as Wyoming, which has 
large land area and relatively few people who have a principal problem, 
is how to provide not the financing but just the actual access to 
health care professionals in such a diffused population compared for 
instance to a highly urbanized State such as New Jersey where the 
issues are fundamentally different. To attempt to have such a health 
care approach to such extreme circumstances is in our opinion not a 
logical beginning point for health care reform.
  Finally, we believe in the concept of partnership, that States and 
local communities and individual citizens will bring a great deal to 
the table. They are the ones who are most directly affected by gaps in 
our current health care system. They are the ones who are most likely 
to have precise reality-based prescriptions to fill those gaps and 
current concerns with our system.
  We believe that the sense of arrogance that has sometimes pervaded 
Federal-State relations--in which we assumed that we knew what the 
solution was and it was only for others to accept our infinite wisdom--
those days are over, and we need to have a respectful relationship.
  Let me, Mr. President, just briefly review the principal titles of 
our legislation. I will submit the legislation for introduction as well 
as a section-by-section analysis of the proposal. But the bill contains 
a title which relates to insurance reform.
  In this area, we are building on a very successful recent experience 
which related to problems including out outright fraud that existed in 
the sale of so-called Medigap insurance policies. These are the 
policies that extend the normal reach of Medicare. The way in which the 
Congress chose to go about dealing with the problem of Medigap 
insurance was to ask the State insurance commission to work together to 
develop a standard set of principles to govern those types of insurance 
policies. Each State must then be required to adopt the basic 
principles that have been developed by these State officials. Each 
State deserves the right to go beyond what the standard set of 
principles were.
  We are proposing a similar policy as it relates to health insurance. 
We are going to call on the 50 insurance commissioners of America to 
develop the programs on portability, on preexisting conditions, on the 
other gaps in health insurance coverage that have caused such anxiety 
and loss of insurance coverage to American families.
  The second title is State innovation. It has two basic approaches. 
One, we are going to seek relief for States from some of the shackles 
that have been imposed upon them for 20 years so that they will have 
the ability to innovate. We want to make it easier for States for 
instance to get waivers from a risk, easier for States to get waivers 
from Medicaid, easier for States to shape their own approach to what 
they believe will best meet the needs of their people. We are going to 
go beyond this in that we are going to provide grants, grants over the 
next 5 years totaling $50 billion to States which apply and which can 
demonstrate that they have a plan that will move
 toward the three objectives of increased coverage, cost control, and 
provision. We believe this will give a positive encouragement to the 
States to accelerate a process of innovation that has been asleep for 
20 years.

  Third, in the area of public health we are proposing for a 
significant increase in the Federal role in public health. The Federal 
Government used to be the primary level of government in public health. 
It is a partnership with the States. Our partnership has been 
faltering. States have been taking up a larger and larger share. With 
the States' financial constraints, one of the problems is we are going 
to see frays in our public health system. Tuberculosis, for instance, 
which is a disease that we thought had been eradicated, has made a 
resurgence and a significant part of the reason for that resurgence is 
laid to the fact that we have gaps in our public health service that 
have allowed that to occur.
  We also are proposing, in the next title, increases in assistance to 
medical research. Again the States will have a major role since many of 
the most significant health care training and research institutions are 
hospitals and medical centers which are associated with State 
government. We also are proposing increased funding for the National 
Institutes of Health. We believe 
[[Page S1922]] that Americans want to have investments that will 
increase our knowledge, and therefore ability to arrest adverse health 
care conditions.
  Finally, we come to what may be the bitter pill of that; that is, how 
we pay for it. We are proposing a $1 per unit increase in the tax on 
tobacco products as a means of financing these initiatives in State 
innovation, public health, in medical and health research. We believe 
this is appropriate in terms of the contribution that reduction in the 
use of these products will have on the health of America. It also will 
raise approximately $68 billion over the next 5 years which will be 
necessary in order to finance the various initiatives that we have 
outlined.
  Finally, we have a provision that relates to fraud and abuse. I want 
to particularly commend Senator Cohen of Maine whose ideas are heavily 
involved in this particular title. He has done outstanding work in the 
area of Medicare fraud and abuse, and has helped to bring to the 
Nation's attention the shocking level of abuse in terms of 
inappropriate services, services not rendered, overbilled services 
which are estimated to be costing us $1 out of every $10 in our 
Medicare expenditures. But fraud and abuse is not limited to Medicare. 
It also occurs in other governmental programs such as CHAMPUS, which is 
the program for the Department of Defense. It occurs in Medicaid with 
the State-Federal partnership program, and it occurs in many private 
insurance programs. We believe that the frontal assault on fraud and 
abuse is an important element of this health care reform effort.
  I close, Mr. President, by quoting a fellow Floridian, columnist and 
editorial writer of the St. Petersburg Times, Martin Dyckman, who 
stated that this approach that we are suggesting to health care reform 
is.

       * * * of course, is how most of this country's important 
     social reform including public schools, child labor laws, 
     anti-sweatshop legislation, wage-hour laws and workers' 
     compensation, came into flower. They originated not in 
     Congress but with the States. It is the genius of federalism.

  We seek to unleash that genius to the benefit of all of the American 
people. As we will learn more about what policies actually contribute 
to increased coverage, containment of cost and the prevention of 
illness, we will improve the lives of individual citizens within their 
States. And with that experience, we will have the opportunity to make 
better policies across America that will improve the lives of all of 
our citizens.
  Mr. President, during the long, arduous and extended debate over 
health care last session of Congress, Senator Hatfield and I were 
concerned that Congress had become fixed on thinking about health care 
reform from a single, centralized, one-size-fits-all, national model. 
In the bipartisan rush to attempt to solve the Nation's problems and 
federalize health care, Congress overlooked what may be the best 
opportunity we have--State-led reform.
  In fact, that has been the case for over two decades. In the early 
1970's, many States were working on initiatives to develop health care 
infrastructure or were, as in the cases of Hawaii, Maine, and 
California, undertaking progressive reform proposals to expand 
coverage. Hawaii passed its Prepaid Health Care Act in 1974 and has 
been the only State to receive necessary implementation waivers from 
Congress. As a result, Hawaii has managed to cover 96 percent of its 
citizens and has costs below the national average.
  Unfortunately, most other State reform initiatives have been stalled 
by the overriding national health reform efforts of President Nixon and 
Congress in 1974, the growing federalization of Medicaid policy 
throughout the period and the passage of the Employee Retirement Income 
Security Act or ERISA in 1974.
  These three efforts to nationalize health care have worked together 
to stall or limit State health reform efforts over the past two 
decades. In fact, ironically, due to the very fact that very little 
experimentation or innovation occurred in the States over the last two 
decades, virtually all of the national health reform proposals--whether 
it was managed competition, single payer, employer or individual 
mandates, pay or play, vouchers, the expansion of Medicare or market 
reform--had as their centerpiece a variety of untested reform theories 
in American society. In short, past efforts to limit state flexibility 
paradoxically helped thwart Congress' reform efforts last year.
  As a result, on September 22, 1994, Senator Hatfield and I introduced 
legislation that would attempt to attain the goals of health reform--
expanded coverage and access, cost containment and improved quality--
with State innovation as an underlying theme. After working to improve 
the legislation over the recess, we are reintroducing the Health 
Partnership Act today. We introduce this legislation as a working 
document and encourage any and all comments to help further refine the 
proposal.
  First, the legislation recognizes that, in a nation as diverse as 
ours, one solution or means cannot be formulated for the wide range of 
health programs and needs in our country. For example, Florida, 
Pennsylvania, Iowa, Rhode Island, and West Virginia have 50 percent 
more elderly per capita than do Alaska, Utah, Colorado, and Georgia. 
Addressing the long term care needs and specific health care problems 
associated with aging would clearly be a greater point of emphasis in 
the former States than in the latter.
  As former Governors and as Senators from States that have enacted 
substantial health reform plans, Senator Hatfield and I believe the 
States have demonstrated some tremendous creativity and ability to 
implement innovative health care initiatives often in the face of stiff 
resistance from the Federal Government.
  As Supreme Court Justice Louis Brandies said in 1932,

       It is one of the happy incidents of the Federal system that 
     a single courageous State may, if its citizens choose, serve 
     as a laboratory; and try novel social and economic 
     experiments without risk to the rest of the country.

  To summarize the Health Partnership Act, the bill establishes 
increased coverage, cost containment, improved quality and 
decentralization as its overriding goals. Our proposal would achieve 
this through Federal-State partnerships in five areas: insurance 
reform, state innovation, public health, medical and health research, 
and fraud and abuse.


                            Insurance reform

  The first title deals with insurance reform. Through recommendations 
from our Nation's State insurance commissioners, our bill would address 
the longstanding problems of portability, preexisting conditions, 
solvency standards, community rating, and other needed insurance market 
reforms.
  The State insurance commissioners would establish a set of national 
minimum insurance standards that would be approved by the Secretary of 
Health and Human Services. This is modeled after the Baucus amendment 
to the Omnibus Budget Reconciliation Act of 1990 that related to the 
development of the largely successful Medicare supplemental insurance 
standards or Medigap. In our bill, States that wish to do beyond the 
minimum standards established by NAIC could proceed with more 
progressive reforms.


                            State Innovation

  Title II is concerned State and local innovation. Both States and 
localities would be allowed to submit health reform projects that--if 
they meet the health reform goals of expanding coverage, cost 
containment and improving quality--would enable them to receive broad 
flexibility in the Medicaid Program, Public Health Service programs, 
the maternal child health block grant and the social services block 
grant.
  To further improve the Federal-State partnership, our legislation 
would grant these waivers and greatly expanded flexibility through the 
vast reduction of process requirements and regulation. Instead, the 
Federal Government and States would jointly develop performance and 
accountability measures that specifically relate to the State's 
project. For example, if a State were to submit a children's health 
initiative as a health reform project, performance measures might 
include infant mortality, immunization rates or unnecessary pediatric 
hospitalization rates.
  Eligible States would also have available $50 billion in grants to 
enact their reforms over a 5-year period.
  The bill also gives states greater flexibility by clarifying the 
impact of 
[[Page S1923]] the ERISA preemption. While ERISA was intended to 
recognize the desire by multi-State corporations to have uniformity in 
their employee benefit programs, it has gone beyond what is required 
for that purpose. The result has been the preemption of an increasing 
number of State laws.
  For example, it does not make sense to preclude States from having 
access to data, from establishing quality standards for HMO's and from 
raising revenue through providers to fund uncompensated care pools. In 
effect, States are prevented by ERISA from enacting some reforms that 
would reduce the numbers of uninsured, contain costs and ensuring, or 
enhancing quality. Our intention in the bill is to find a balance 
between the legitimate and proper interests on business and labor in 
ERISA and that of States.
  Consequently, the bill provides for the establishment of an ERISA 
Review Commission to study the issues affected by ERISA and to make 
recommendations on points of compromise between States, business, and 
labor.


                             public health

  Title III promotes prevention, public health, cost effective 
treatment, and improved overall health through four distinct 
approaches: First, strengthening the partnership with and capacity of 
local and state public health departments to carry out core public 
health functions; second, expanding access to preventive and primary 
care services for vulnerable and medically underserved communities; 
third, supporting applied research on prevention and effective public 
health interventions, and fourth, addressing public health work force 
needs and access problems.
  At a time when tuberculosis, AIDS and other public health problems 
such as E. coli increasingly threaten the public's health, as 
investment in our Nation's public health infrastructure as necessary 
and overdue.
  Dr. C. Everett Koop and other members of the Health Project 
Consortium published an article in the New England Journal of Medicine 
in 1983 noting that 70 percent of all illness is preventable and that 
there are about 1 million deaths annually that are preventable. That 
amounts to in excess of $600 billion annually in costs. However, our 
Nation now invests less than 1 percent of our total health care costs 
on health care. The waste of both lives and money must be addressed.
  As a result, our legislation would increase the investment in public 
health by $9 billion over 5 years.


                      medical and health research

  Title IV emphasizes medical and health research. Our initiative 
recognizes the importance of medical and health research and would 
provide $6 billion over a 5-year period in increased funding for that 
function. This builds on the excellent track record of medical research 
in our Nation's State-supported research and medical centers. In 
addition, if finding the cure for diseases such as AIDS, Alzheimer's, 
and cancer is to be achieved, such an investment is critical.


                            fraud and abuse

  Title V is a section tackles the issue of fraud and abuse. Senator 
Bill Cohen, who has studied this issue at length and contributed to 
this section, recently said,

       As much as $100 billion is lost each year to fraud and 
     abuse, driving up the cost of health care in America for 
     million of patients and families--as well as for the American 
     taxpayer. Losses over the last 5 years are almost four times 
     the total costs to date of the entire savings and loan 
     crisis.

  One of the provisions establishes closer coordination of fraud 
investigation among the Federal, State, and private sector. This would 
positively impact State and local governments as providers, payers, and 
employers.


                                  cost

  The bill's costs over a 5-year period would be $65 billion which 
Senator Hatfield and I propose to be financed with a $1 tax on tobacco 
products. This funding source, while providing funds for our proposal, 
would also discourage smoking and improve the overall health of 
Americans.


                         why state-led reform?

  Why federalism or state-led reform? First and most obvious, the 
Federal Government failed and will continue to fail to truly address 
the agreed upon goals of this nation in health care.
  Second, the combination of Federal failure, hinderance of State 
flexibility through Medicaid regulations and ERISA, and anticipate 
budget cuts to Medicare and Medicaid this year would
 result in what I would call triple-negative health reform. We should 
break that downward spiral at the second point and grant State and 
local governments increased flexibility to improve our Nation's health 
care. The contrast would be further Federal inaction and abritrary 
budget cuts, neither prescriptions for improved health.

  Third, the diversity in our Nation dictates federalism. As St. 
Petersburg columnist Martin Dyckman said in a column endorsing our 
approach,

       This, of course, is now most of this country's important 
     social reform including public schools, child labor laws, 
     anti-sweatshop legislation, wage-hour laws and workers' 
     compensation, came into flower. They originated not in 
     Congress but with the States. It is the genius of federalism.

  Fourth, States have historically led in reform--Hawaii, Minnesota, 
Florida, New York, Maryland, Oregon, and Washington and others come to 
mind. States have led in reform because they can respond quicker to the 
rapid changing dynamics of health care. They are also more efficient. 
One look at the Medicare fraud problem in south Florida would shy 
anybody away from having Washington, DC, too involved in reform.
  Fifth, doing nothing is unacceptable. State and local governments 
continue to bear the brunt and serve as much of our Nation's safety 
net. As last year's Advisory Committee on Intergovernmental Relations 
report entitled ``Local Government Responsibilities in Health care'' 
noted, ``Local governments spend an estimated $85 billion per year on 
health care services--about one of every eight dollars spent by local 
governments.''
  Failing to recognize this important contribution and failure to 
address it will only increase this heavy burden. Uninsured rates will 
only continue to increase, costs will continue to explode while 
problems such as infant mortality, where the United States ranks 21st 
in the world, are not going away.
  Finally, waiting for uniformity is a pipedream. As many of you know 
only too well. Medicaid regulation and ERISA have effectively preempted 
the ability of State and local government from enacting anything other 
than incremental reform for 20 years due to what everyone thought was 
impending national health care reform. Since that time, States have 
largely been held back from enacting reforms while Presidents Nixon, 
Ford, Carter, Reagan, Bush, and Clinton have all failed to enact 
comprehensive national health reform.
  Therefore, the purpose of our bill is to free the States to be 
innovative to addressing their specific health care needs and problem 
while providing States the resources to encourage and accelerate the 
process. Mr. President, I believe the time for State-led reform is now.
  Mr. President, I ask unanimous consent that the text of the bill and 
additional material be printed in the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:
                                 S. 308

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

     SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

       (a) Short Title.--This Act may be cited as the ``Health 
     Partnership Act of 1995''.
       (b) Table of Contents.--The table of contents of this Act 
     is as follows:

Sec. 1. Short title; table of contents.
Sec. 2. Findings.
Sec. 3. Definitions.

                    TITLE I--HEALTH INSURANCE REFORM

Sec. 1001. Establishment of standards.
Sec. 1002. Expansion and revision of medicare select policies.
Sec. 1003. Effective dates.

                       TITLE II--STATE INNOVATION

                   Subtitle A--State Waiver Authority

Sec. 2001. State health reform projects.

                         Subtitle B--State Laws

      Part A--Existing Waivers and Hawaii Prepaid Health Care Act

Sec. 2101. Continuance of existing Federal law waivers.
Sec. 2102. Preemption of Hawaii Prepaid Health Care Act.

                          Part B--ERISA Review

Sec. 2110. Specific exemption from ERISA preemption.
Sec. 2111. Discretionary exemptions from ERISA preemptions.
[[Page S1924]] Sec. 2112. Procedures for adopting discretionary 
              exemptions.
Sec. 2113. Operation of the Commission.

 TITLE III--PUBLIC HEALTH AND RURAL AND UNDERSERVED ACCESS IMPROVEMENT

Sec. 3001. Short title.
Sec. 3002. Establishment of new title XXVII regarding public health 
              programs.

                 TITLE IV--MEDICAL AND HEALTH RESEARCH

Sec. 4001. Short title.
Sec. 4002. Findings.
Sec. 4003. National Fund for Health Research.

                        TITLE V--FRAUD AND ABUSE

Sec. 5001. Short title.

         Subtitle A--All-Payer Fraud and Abuse Control Program

Sec. 5101. All-payer fraud and abuse control program.
Sec. 5102. Application of certain Federal health anti-fraud and abuse 
              sanctions to fraud and abuse against any health plan.

     Subtitle B--Revisions to Current Sanctions for Fraud and Abuse

Sec. 5201. Mandatory exclusion from participation in medicare and State 
              health care programs.
Sec. 5202. Establishment of minimum period of exclusion for certain 
              individuals and entities subject to permissive exclusion 
              from medicare and State health care programs.
Sec. 5203. Permissive exclusion of individuals with ownership or 
              control interest in sanctioned entities.
Sec. 5204. Sanctions against practitioners and persons for failure to 
              comply with statutory obligations.
Sec. 5205. Intermediate sanctions for medicare health maintenance 
              organizations.
Sec. 5206. Effective date.

                  Subtitle C--Civil Monetary Penalties

Sec. 5301. Civil monetary penalties.

     Subtitle D--Payments for State Health Care Fraud Control Units

Sec. 5401. Establishment of State fraud units.
Sec. 5402. Requirements for State fraud units.
Sec. 5403. Scope and purpose.
Sec. 5404. Payments to States.

                      TITLE VI--REVENUE PROVISIONS

Sec. 6000. Amendment of 1986 Code.

                    Subtitle A--Financing Provisions

              Part I--Increase in Tax on Tobacco Products

Sec. 6001. Increase in excise taxes on tobacco products.
Sec. 6002. Modifications of certain tobacco tax provisions.
Sec. 6003. Imposition of excise tax on manufacture or importation of 
              roll-your-own tobacco.

               Subtitle B--Health Care Reform Trust Fund

Sec. 6101. Establishment of Health Care Reform Trust Fund.
     SEC. 2. FINDINGS.

       The Congress finds the following:
       (1) Americans support universal coverage. The people of 
     this country agree that all Americans should be guaranteed 
     access to affordable, high-quality health care.
       (2) Although there is common agreement on the goal of 
     universal coverage, there are many different ways to achieve 
     this goal. The States can play an important role in achieving 
     universal coverage for our population, demonstrating 
     additional health reforms that may be needed on a national 
     level to enhance access to affordable, high-quality health 
     care. A number of States have already initiated health care 
     reform that takes into account their special economic, 
     demographic, and financial conditions. These State models 
     combine unique reform innovations with the various strengths 
     of their existing State health care systems, including market 
     competition, employer pools and association plans, technology 
     review and public health outreach projects. The States can 
     also serve as testing grounds to identify effective 
     alternatives for making the transition to universal coverage, 
     while maintaining the strengths of the current health care 
     system.
       (3) Maintaining the high quality of health care Americans 
     expect and controlling costs are also important goals of 
     health care reform. As payers of health care, the States have 
     a strong incentive to ensure that such States purchase high-
     quality, cost-effective services for the residents of such 
     States. The States can develop and test alternative payment 
     and delivery systems to ensure that these goals are achieved.
       (4) In light of the success of various State-initiated 
     reforms and in the absence of comprehensive Federal health 
     reform, there are many health-related issues that should be 
     addressed at the State level. As with social security and 
     child labor protections, States can lead the way in testing 
     ideas for national application or application in other 
     States.
       (5) The States should have the flexibility to test 
     alternative health reforms with the objectives of increasing 
     access to care, controlling health care costs, and 
     maintaining or improving the quality of health care.

     SEC. 3. DEFINITIONS.

       Unless specifically provided otherwise, as used in this 
     Act:
       (1) Naic.--The term ``NAIC'' means the National Association 
     of Insurance Commissioners.
       (2) Performance measures.--The term ``performance 
     measures'' means measurable indicators that are used to 
     assess progress towards achieving the broad goals of 
     increasing access to care, controlling health care costs, and 
     maintaining or improving the quality of health care.
       (3) Secretary.--The term ``Secretary'' means the Secretary 
     of Health and Human Services.
       (4) State.--The term ``State'' means each of the several 
     States, the District of Columbia, Puerto Rico, the Virgin 
     Islands, the Northern Marina Islands, and America Samoa.
                    TITLE I--HEALTH INSURANCE REFORM

     SEC. 1001. ESTABLISHMENT OF STANDARDS.

       (a) In General.--The Secretary shall request that the NAIC 
     develop, not later than 6 months after the date of enactment 
     of this Act, standards for health insurance plans with 
     respect to--
       (1) the renewability of coverage under such plans;
       (2) the portability of coverage under such plans, 
     including--
       (A) limitations on the use of pre-existing conditions;
       (B) the concept of an ``amnesty period'' during which 
     limitations on pre-existing conditions would be suspended; 
     and
       (C) the advisability of open enrollment periods;
       (3) guaranteed issue with respect to all health insurance 
     coverage products;
       (4) the establishment of an adjusted community rating 
     system with adjustment factors limited to age (with no more 
     than a 2:1 variation in premiums based on age) and geography;
       (5) solvency standards for health insurance plans 
     regulations under Federal and State law, including the 
     development of risk-based capital standards for health plans, 
     solvency standards for health plans, self-funded employer-
     sponsored health plans, and multi-employer welfare 
     arrangements and association plans;
       (6) stop-loss standards for self-funded health insurance 
     plans and multi-employer welfare arrangements and association 
     plans;
       (7) the identification of minimum employer size for self-
     funding and the interrelationship between self-funding and 
     the community-rated pool of enrollees; and
       (8) any other areas determined appropriate by the 
     Secretary, including enforcement of standards under this 
     section.
       (b) Review.--Not later than 60 days after receipt of the 
     standards developed by the NAIC under subsection (a), the 
     Secretary shall complete a review of such standards. If the 
     Secretary, based on such review, approves such standards, 
     such standards shall apply with respect to all health 
     insurance plans offered or operating in a State on and after 
     the date specified in subsection (d) herein.
       (c) Failure To Develop Standards or Failure to Approve.--If 
     the NAIC fails to develop standards within the 6-month period 
     referred to in subsection (a), or the Secretary fails to 
     approve any standards developed under such subsection, the 
     Secretary shall develop, not later than 15 months after the 
     date of enactment of this Act, standards applicable to health 
     insurance plans, including standards related to the matter 
     described in paragraphs (1) through (8) of subsection (a) 
     (``Federal standards'') and such standards shall apply with 
     respect to all health insurance plans offered or operating in 
     a State on and after the date specified in subsection (d) 
     herein.
       (d) Effective Date.--
       (1) In general.--Except as provided in paragraph (2), the 
     effective date specified in this subsection for a State is 
     the date the State adopts the standards developed under this 
     section or 1 year after the date the NAIC or the Secretary 
     first adopts such standards, whichever is earlier.
       (2) Exception.--In the case of a State which the Secretary, 
     in consultation with the NAIC, identifies as--
       (A) requiring State legislation (other than legislation 
     appropriating funds) in order for health insurance policies 
     to meet the standards developed under this section, but
       (B) having a legislature which is not scheduled to meet in 
     1996 in a legislative session in which such legislation may 
     be considered,

     the date specified in this subsection is the first day of the 
     first calendar quarter beginning after the close of the first 
     legislative session of the State legislature that begins on 
     or after January 1, 1996. For purposes of the previous 
     sentence, in the case of a State that has a 2-year 
     legislative session, each year of such session shall be 
     deemed to be a separate regular session of the State 
     legislature.
       (e) Working Group.--In promulgating standards under this 
     section, the NAIC or Secretary shall consult with a working 
     group composed or representatives of issuers of health 
     insurance policies, consumer groups, health insurance 
     beneficiaries, and other qualified individuals. Such 
     representatives shall be selected in a manner so as to assure 
     balanced representation among the interested groups.
       (f) Effect on State Law.--Nothing in this section shall be 
     construed to preempt any State law 
     [[Page S1925]] to the extent that such State law implements 
     more progressive reforms than those implemented under the 
     standards developed under this section, as determined by the 
     Secretary.

     SEC. 1002. EXPANSION AND REVISION OF MEDICARE SELECT 
                   POLICIES.

       (a) Permitting Medicare Select Policies in All States.--
       (1) In general.--Subsection (c) of section 4358 of the 
     Omnibus Budget Reconciliation Act of 1990 (42 U.S.C. 1320c-3 
     note) is hereby repealed.
       (2) Conforming amendment.--Section 4358 of such Act (42 
     U.S.C. 1320c-3 note) is amended by redesignating subsection 
     (d) as subsection (c).
       (b) Requirements of Medicare Select Policies.--Section 
     1882(t)(1) of the Social Security Act (42 U.S.C. 
     1395ss(t)(1)) is amended to read as follows:
       ``(1)(A) If a medicare supplemental policy meets the 1991 
     NAIC Model Regulation or 1991 Federal Regulation and 
     otherwise complies with the requirements of this section 
     except that--
       ``(i) the benefits under such policy are restricted to 
     items and services furnished by certain entities (or reduced 
     benefits are provided when items or services are furnished by 
     other entities), and
       ``(ii) in the case of a policy described in subparagraph 
     (C)(i)--
       ``(I) the benefits under such policy are not one of the 
     groups or packages of benefits described in subsection 
     (p)(2)(A),
       ``(II) except for nominal copayments imposed for services 
     covered under part B of this title, such benefits include at 
     least the core group of basic benefits described in 
     subsection (p)(2)(B), and
       ``(III) an enrollee's liability under such policy for 
     physician's services covered under part B of this title is 
     limited to the nominal copayments described in subclause 
     (II),

     the policy shall nevertheless be treated as meeting those 
     standards if the policy meets the requirements of 
     subparagraph (B).
       ``(B) A policy meets the requirements of this subparagraph 
     if--
       ``(i) full benefits are provided for items and services 
     furnished through a network of entities which have entered 
     into contracts or agreements with the issuer of the policy;
       ``(ii) full benefits are provided for items and services 
     furnished by other entities if the services are medically 
     necessary and immediately required because of an unforeseen 
     illness, injury, or condition and it is not reasonable given 
     the circumstances to obtain the services through the network;
       ``(iii) the network offers sufficient access;
       ``(iv) the issuer of the policy has arrangements for an 
     ongoing quality assurance program for items and services 
     furnished through the network;
       ``(v)(I) the issuer of the policy provides to each enrollee 
     at the time of enrollment an explanation of the matters 
     described in subparagraph (D), and
       ``(II) each enrollee prior to enrollment acknowledges 
     receipt of the explanation provided under subclause (I); and
       ``(vi) the issuer of the policy makes available to 
     individuals, in addition to the policy described in this 
     subsection, any policy (otherwise offered by the issuer to 
     individuals in the State) that meets the 1991 Model NAIC 
     Regulation or 1991 Federal Regulation and other requirements 
     of this section without regard to this subsection.
       ``(C)(i) A policy described in this subparagraph--
       ``(I) is offered by an eligible organization (as defined in 
     section 1876(b)),
       ``(II) is not a policy or plan providing benefits pursuant 
     to a contract under section 1876 or an approved demonstration 
     project described in section 603(c) of the Social Security 
     Amendments of 1983, section 2355 of the Deficit Reduction Act 
     of 1984, or section 9412(b) of the Omnibus Budget 
     Reconciliation Act of 1986, and
       ``(III) provides benefits which, when combined with 
     benefits which are available under this title, are 
     substantially similar to benefits under policies offered to 
     individuals who are not entitled to benefits under this 
     title.
       ``(ii) In making a determination under subclause (III) of 
     clause (i) as to whether certain benefits are substantially 
     similar, there shall not be taken into account, except in the 
     case of preventive services, benefits provided under policies 
     offered to individuals who are not entitled to benefits under 
     this title which are in addition to the benefits covered by 
     this title and which are benefits an entity must provide in 
     order to meet the definition of an eligible organization 
     under section 1876(b)(1).
       ``(D) The matters described in this subparagraph, with 
     respect to a policy, are as follows:
       ``(i) The restrictions on payment under the policy for 
     services furnished other than by or through the network.
       ``(ii) Out of area coverage under the policy.
       ``(iii) The policy's coverage of emergency services and 
     urgently needed care.
       ``(iv) The availability of a policy through the entity that 
     meets the 1991 Model NAIC Regulation or 1991 Federal 
     Regulation without regard to this subsection and the premium 
     charged for such policy.''.
       (c) Renewability of Medicare Select Policies.--Section 
     1882(q)(1) of the Social Security Act (42 U.S.C. 
     1395ss(q)(1)) is amended--
       (1) by striking ``(1) Each'' and inserting ``(1)(A) Except 
     as provided in subparagraph (B), each'';
       (2) by redesignating subparagraphs (A) and (B) as clauses 
     (i) and (ii), respectively; and
       (3) by adding at the end the following new subparagraph:
       ``(B)(i) Except as provided in clause (ii), in the case of 
     a policy that meets the requirements of subsection (t), an 
     issuer may cancel or nonrenew such policy with respect to an 
     individual who leaves the service area of such policy.
       ``(ii) If an individual described in clause (i) moves to a 
     geographic area where the issuer described in clause (i), or 
     where an affiliate of such issuer, is issuing medicare 
     supplemental policies, such individual must be permitted to 
     enroll in any medicare supplemental policy offered by such 
     issuer or affiliate that provides benefits comparable to or 
     less than the benefits provided in the policy being canceled 
     or nonrenewed. An individual whose coverage is canceled or 
     nonrenewed under this subparagraph shall, as part of the 
     notice of termination or nonrenewal, be notified of the right 
     to enroll in other medicare supplemental policies offered by 
     the issuer or its affiliates.
       ``(iii) For purposes of this subparagraph, the term 
     `affiliate' shall have the meaning given such term by the 
     1991 NAIC Model Regulation.''.
       (d) Civil Money Penalty.--Section 1882(t)(2) of the Social 
     Security Act (42 U.S.C. 1395ss(t)(2)) is amended--
       (1) by striking ``(2)'' and inserting ``(2)(A)'';
       (2) by redesignating subparagraphs (A), (B), (C), and (D) 
     as clauses (i), (ii), (iii), and (iv), respectively;
       (3) in clause (iv), as so redesignated--
       (A) by striking ``paragraph (1)(E)(i)'' and inserting 
     ``paragraph (1)(B)(v)(I), and
       (B) by striking ``paragraph (1)(E)(ii)'' and inserting 
     ``paragraph (1)(B)(v)(II)'';
       (4) by striking ``the previous sentence'' and inserting 
     ``this subparagraph''; and
       (5) by adding at the end the following new subparagraph:
       ``(B) If the Secretary determines that an issuer of a 
     policy approved under paragraph (1) has made a 
     misrepresentation to the Secretary or has provided the 
     Secretary with false information regarding such policy, the 
     issuer is subject to a civil money penalty in an amount not 
     to exceed $100,000 for each such determination. The 
     provisions of section 1128A (other than the first sentence of 
     subsection (a) and other than subsection (b)) shall apply to 
     a civil money penalty under this subparagraph in the same 
     manner as such provisions apply to a penalty or proceeding 
     under section 1128A(a).''.

     SEC. 1003. EFFECTIVE DATES.

       (a) NAIC Standards.--If, within 6 months after the date of 
     the enactment of this Act, the NAIC makes changes in the 1991 
     NAIC Model Regulation (as defined in section 1882(p)(1)(A) of 
     the Social Security Act) to incorporate the additional 
     requirements imposed by the amendments made by section 1002, 
     section 1882(g)(2)(A) of such Act shall be applied in each 
     State, effective for policies issued to policyholders on and 
     after the date specified in subsection (c), as if the 
     reference to the Model Regulation adopted on June 6, 1979, 
     were a reference to the 1991 NAIC Model Regulation (as so 
     defined) as changed under this subsection (such changed 
     Regulation referred to in this section as the ``1995 NAIC 
     Model Regulation'').
       (b) Secretary Standards.--If the NAIC does not make changes 
     in the 1991 NAIC Model Regulation (as so defined) within the 
     6-month period specified in subsection (a), the Secretary of 
     Health and Human Services (in this subsection as the 
     ``Secretary'') shall promulgate a regulation and section 
     1882(g)(2)(A) of the Social Security Act shall be applied in 
     each State, effective for policies issued to policyholders on 
     and after the date specified in subsection (c), as if the 
     reference to the Model Regulation adopted in June 6, 1979, 
     were a reference to the 1991 NAIC Model Regulation (as so 
     defined) as changed by the Secretary under this subsection 
     (such changed Regulation referred to in this section as the 
     ``1995 Federal Regulation'').
       (c) Date Specified.--
       (1) In general.--Subject to paragraph (2), the date 
     specified in this subsection for a State is the earlier of--
       (A) the date the State adopts the 1995 NAIC Model 
     Regulation or the 1995 Federal Regulation; or
       (B) 1 year after the date the NAIC or the Secretary first 
     adopts such regulations.
       (2) Additional legislative action required.--In the case of 
     a State which the Secretary identifies, in consultation with 
     the NAIC, as--
       (A) requiring State legislation (other than legislation 
     appropriating funds) in order for medicare supplemental 
     policies to meet the 1995 NAIC Model Regulation or the 1995 
     Federal Regulation, but
       (B) having a legislature which is not scheduled to meet in 
     1995 in a legislative session in which such legislation may 
     be considered, the date specified in this subsection is the 
     first day of the first calendar quarter beginning after the 
     close of the first legislative session of the State 
     legislature that begins on or after January 1, 1995. For 
     purposes of the previous sentence, in the case of a State 
     that has a 2-year legislative session, each year of such 
     session shall be deemed to be a separate regular session of 
     the State legislature.
               [[Page S1926]] TITLE II--STATE INNOVATION
                   Subtitle A--State Waiver Authority

     SEC. 2001. STATE HEALTH REFORM PROJECTS.

       (a) Objectives.--The objectives of the waiver programs 
     approved under this section shall include, but not be limited 
     to--
       (1) achieving the goals of increased health coverage and 
     access;
       (2) containing the annual rate of growth in public and 
     private health care expenditures;
       (3) ensuring that patients receive high-quality, 
     appropriate health care; and
       (4) testing alternative reforms, such as building on the 
     private health insurance system or creating new systems, to 
     achieve the objectives of this Act.
       (b) State Health Reform Applications.--
       (1) In general.--A State, in consultation with local 
     governments involved in the provision of health care, may 
     apply for--
       (A) an alternative State health program waiver under 
     paragraph (2); or
       (B) a limited State health care waiver under paragraph (3).
       (2) Alternative state health program waivers.--
       (A) In general.--In accordance with this paragraph, each 
     State desiring to implement an alternative State health 
     program may submit an application for waiver to the Secretary 
     for approval.
       (B) Waiver requirements specified.--A State that desires to 
     receive a program waiver under this paragraph shall prepare 
     and submit to the Secretary, as part of the application, a 
     State health care plan that shall--
       (i) provide and describe the manner in which the State will 
     ensure that individuals residing within the State have 
     expanded access to health care coverage;
       (ii) describe the number and percentage of current 
     uninsured individuals who will achieve coverage under the 
     alternative State health program;
       (iii) describe the benefits package that will be provided 
     to all classes of beneficiaries under the alternative State 
     health program;
       (iv) identify Federal, State, or local programs that 
     currently provide health care services in the State and 
     describe how such programs could be incorporated into or 
     coordinated with the alternative State health program, to the 
     extent practicable;
       (v) provide that the State will develop and implement 
     health care cost containment procedures;
       (vi) describe the public and private sector financing to be 
     provided for the alternative State health program;
       (vii) estimate the amount of Federal, State, and local 
     expenditures, as well as, the costs to business and 
     individuals under the alternative State health program;
       (viii) describe how the State plan will ensure the 
     financial solvency of the alternative State health program;
       (ix) describe any changes in eligibility for public 
     subsidies;
       (x) provide assurances that Federal expenditures under the 
     alternative State health program shall not exceed the Federal 
     expenditures, other than expenditures made available under 
     this Act, which would otherwise be made in the aggregate for 
     the entire program period;
       (xi) provide quality control assurances, agreements, and 
     performance measures as required by the Secretary;
       (xii) provide for the development and implementation of a 
     State health care delivery system that provides increased 
     access to care in areas of the State where there is an 
     inadequate supply of health care providers;
       (xiii) identify all Federal law waivers required to 
     implement the alternative State health program, including 
     such waivers necessary to achieve the access, cost 
     containment, and quality goals of this Act and the 
     alternative State health program; and
       (xiv) provide that the State will prepare and submit the 
     Secretary such reports as the Secretary may require to carry 
     out program evaluations.
       (C) Project waivers.--
       (i) Criteria for selection.--In selecting from among the 
     applications for alternative State health program waivers, 
     the Secretary shall be satisfied that each approved State 
     alternative State health program--

       (I) will not have a negative effect on quality of care;
       (II) increase coverage of or access for the State's 
     population; and
       (III) will--

       (aa) provide quality of care and premium comparisons 
     directly to employers and individuals in an easy-to-use 
     format,
       (bb) contract with an external peer review organization to 
     monitor the quality of health care plans, and
       (cc) establish a mechanism within the State's grievance 
     process that allows members of a health plan to disenroll at 
     any time if it can be shown that such members were provided 
     erroneous information that biased their health plan 
     selection.
       (ii) Waiver approval.--The Secretary shall approve 
     applications submitted by States that meet the access, cost 
     containment, and quality goals established in this Act and 
     shall waive to the extent necessary to conduct each 
     alternative State health program any of the requirements of 
     this Act, including, but not limited to, eligibility 
     requirements; alternative data collection systems and 
     sampling designs that focus on measuring health status, 
     patient treatment outcomes, and patient satisfaction with 
     health plans, rather than on the collection of 100 percent of 
     patient encounters; and benefit designs; and any provisions 
     of Federal law contained in the following:

       (I) Titles V, XIX, and XX of the Social Security Act.
       (II) Title XVIII of the Social Security Act, to the extent 
     such a waiver is granted only for the operation of an all-
     payor system or a long-term care system.
       (III) The Public Health Service Act.
       (IV) Any other Federal law authorizing a Federal health 
     care program that the Secretary identifies as providing 
     health care services to qualified recipients.

       (3) Limited state health care waivers.--Each State which 
     does not receive or apply for an approved application under 
     paragraph (2) may apply for a limited State health care 
     waiver. The Secretary shall award limited State health care 
     waivers to ensure State demonstrations of health reforms that 
     could address, but are not limited to addressing, the 
     following issues that are likely to provide guidance for the 
     development of additional national health reforms:
       (A) Integration of acute and long-term care systems, 
     including delivery and financing systems.
       (B) Establishment of methodologies that limit expenditures 
     or establish global budgets, including rate setting and 
     provider reimbursements.
       (C) Implementation of a quality management and improvement 
     system.
       (D) Strategies to improve the proper speciality and 
     geographic distribution of the health care work force.
       (E) Initiatives to improve the population's health status.
       (F) Development of uniform health data sets that emphasize 
     the measurement of patient satisfaction, treatment outcomes, 
     and health status.
       (G) Methods for coordinating or integrating State-funded 
     programs that provide services for low-income individuals, 
     including programs authorized by this Act.
       (H) Programs to improve public health.
       (I) Reforms intended to reduce health care fraud and abuse.
       (J) Reforms to reduce the incidence of defensive medicine 
     and practitioner liability costs associated with medical 
     malpractice.
       (K) Development of a uniform billing system.
       (c) Additional Rules Regarding Applications.--
       (1) Technical assistance.--The Secretary shall, if 
     requested, provide technical assistance to States to assist 
     such States in developing waiver applications under this 
     section.
       (2) Initial review.--The Secretary shall complete an 
     initial review of each State application for a waiver under 
     paragraph (2) or (3) of subsection (b) within 40 days of the 
     receipt of such application, analyze the scope of the 
     proposal, and determine whether additional information is 
     needed from the State. The Secretary shall issue a 
     preliminary opinion concerning the likelihood that the 
     application will be approved within such 40-day period and 
     shall advise the State within such period of the need to 
     submit additional information.
       (3) Final decision.--The Secretary shall, within 90 days of 
     the later of--
       (A) the receipt of a State application for a waiver under 
     paragraph (2) or (3) of subsection (b), or
       (B) the date on which the Secretary receives additional 
     information requested from a State under paragraph (1),

     issue a final decision concerning such application.
       (4) Waiver period.--A State waiver may be approved for a 
     period of 5 years and may be extended for subsequent 5-year 
     periods upon approval by the Secretary, except that a shorter 
     period may be requested by a State and granted by the 
     Secretary.
       (d) Qualification for Federal Funds.--For purposes of this 
     Act, a State with an approved alternative health care system 
     under subsection (b)(2) shall be considered a participating 
     State and shall maintain such status if such State meets the 
     requirements established by the Secretary in the waiver 
     approval and in this section.
       (e) Evaluation, Monitoring, and Compliance.--
       (1) State health reform advisory commission.--
       (A) In general.--Within 90 days after the date of the 
     enactment of this Act, the Secretary shall establish, an 
     appoint the members of, a 17-member State Health Reform 
     Advisory Commission (hereafter in this subsection referred to 
     as the ``Commission'') that shall--
       (i) be comprised of members representing relevant 
     participants in State programs, including representatives of 
     State government, employers, consumers, providers, and 
     insurers;
       (ii) be responsible for monitoring the status and progress 
     achieved under waivers granted under this section;
       (iii) report to the public concerning progress made by 
     States with respect to the performance measures and goals 
     established under this Act and the State project application 
     procedures, by region and State jurisdiction;
       (iv) promote information exchange between States and the 
     Federal Government; and
       (v) be responsible for making recommendations to the 
     Secretary and the Congress, using equivalency or minimum 
     standards, for minimizing the negative effect of State 
     waivers on national employer groups, provider organizations, 
     and insurers because of 
     [[Page S1927]] differing State requirements under the 
     waivers.
       (B) Period of appointment; vacancies.--Members shall be 
     appointed for the life of the Commission. Any vacancy in the 
     Commission shall not affect its powers, but shall be filled 
     in the same manner as the original appointment.
       (C) Chairperson, meetings.--
       (i) Chairperson.--The Commission shall select a Chairperson 
     from among its members.
       (ii) Quorum.--A majority of the members of the Commission 
     shall constitute a quorum, but a lesser number of members may 
     hold hearings.
       (iii) Meetings.--Not later than 30 days after the date on 
     which all members of the Commission have been appointed, the 
     Commission shall hold its first meeting. The Commission shall 
     meet at the call of the Chairperson.
       (D) Powers of the commission.--
       (i) Hearings.--The Commission may hold such hearings, sit 
     and act at such times and places, take such testimony, and 
     receive such evidence as the Commission considers advisable 
     to carry out the purposes of this subsection.
       (ii) Information.--The Commission may secure directly from 
     any Federal department or agency such information as the 
     Commission considers necessary to carry out the provisions of 
     this subsection. Upon request of the Chairperson of the 
     Commission, the head of such department or agency shall 
     furnish such information to the Commission.
       (iii)  Postal services.--The Commission may use the United 
     States mails in the same manner and under the same conditions 
     as other departments and agencies of the Federal Government.
       (iv) Gifts.--The Commission may accept, use, and dispose of 
     gifts or donations of services or property.
       (E) Personnel matters.--
       (i) Compensation.--Each member of the Commission who is not 
     an officer or employee of the Federal Government shall be 
     compensated at a rate equal to the daily equivalent of the 
     annual rate of basic pay prescribed for level IV of the 
     Executive Schedule under section 5315 of title 5, United 
     States Code, for each day (including travel time) during 
     which such member is engaged in the performance of the duties 
     of the Commission. All members of the Commission who are 
     officers or employees of the United States shall serve 
     without compensation in addition to that received for their 
     services as officers or employees of the United States.
       (ii) Travel expenses.--The members of the Commission shall 
     be allowed travel expenses, including per diem in lieu of 
     subsistence, at rates authorized for employees of agencies 
     under subchapter I of chapter 57 of title 5, United States 
     Code, while away from their homes or regular places of 
     business in the performance of services for the Commission.
       (iii) Staff.--The Chairperson of the Commission may, 
     without regard to the civil service laws and regulations, 
     appoint and terminate an executive director and such other 
     additional personnel as may be necessary to enable the 
     Commission to perform its duties. The employment of an 
     executive director shall be subject to confirmation by the 
     Commission.
       (iv) Detail of government employees.--Any Federal 
     Government employee may be detailed to the Commission without 
     reimbursement, and such detail shall be without interruption 
     or loss of civil service status or privilege.
       (v) Temporary and intermittent services.--The Chairperson 
     of the Commission may procure temporary and intermittent 
     services under section 3109(b) of title 5, United States 
     Code, at rates for individuals which do not exceed the daily 
     equivalent of the annual rate of basic pay prescribed for 
     level V of the Executive Schedule under section 5316 of such 
     title.
       (F) Funding.--For the purpose of carrying out this 
     subsection, there are authorized to be appropriated from the 
     Fund established under section 9551 of the Internal Revenue 
     Code of 1986, $1,000,000 for each of the fiscal years 1996 
     through 2000.
       (2) Annual reports by states.--Each State that has received 
     a waiver approval shall submit to the Secretary an annual 
     report based on the period representing the respective 
     State's fiscal year, detailing compliance with the 
     requirements established by the Secretary in the waiver 
     approval and in this section.
       (3) Corrective action plans.--If a State is not in 
     compliance, the Secretary shall develop, in conjunction with 
     all the approved States, a corrective action plan.
       (4) Termination.--For good cause, the Secretary may revoke 
     any waiver of Federal law granted under this section, and if 
     necessary, may terminate any alternative State health 
     program. Such decisions shall be subject to a petition for 
     reconsideration and appeal pursuant to regulations 
     established by the Secretary.
       (5) Evaluations by secretary.--The Secretary shall prepare 
     and submit to the Committee on Finance and the Committee on 
     Labor and Human Resources of the Senate and the Committee on 
     Commerce and the Committee on Ways and Means of the House of 
     Representatives annual reports that shall contain--
       (A) a description of the effects of the reforms undertaken 
     in States receiving waiver approvals under this section;
       (B) an evaluation of the effectiveness of such reforms in--
       (i) expanding health care coverage for State residents;
       (ii) providing health care to State residents with special 
     needs;
       (iii) reducing or containing health care costs in the 
     States; and
       (iv) improving the quality of health care provided in the 
     States; and
       (C) recommendations regarding the advisability of 
     increasing Federal financial assistance for State alternative 
     State health program initiatives, including the amount and 
     source of such assistance.
       (f) State Commissions.--The Secretary shall encourage 
     States to establish a State commission to gather, review and 
     report to the public concerning the progress the State is 
     making in meeting the project goals of improved access, cost 
     containment and quality and established performance measures.
       (g) Funding.--
       (1) In general.--The Secretary may provide a grant to a 
     State that has an application for a waiver approved under 
     subsection (b)(2) to enable such State to carry out an 
     alternative State health program in the State.
       (2) Amount of grant.--The amount of a grant provided to a 
     State under paragraph (1) shall be determined pursuant to an 
     allocation formula established by the Secretary.
       (3) Performance-based funding allocation and 
     prioritization.--In awarding grants under paragraph (1), the 
     Secretary shall--
       (A) give priority to those State projects that the 
     Secretary determines have the greatest opportunity to succeed 
     in providing expanded health insurance coverage and access 
     without penalizing those States that have been successful in 
     expanding coverage and access through reform efforts in prior 
     years;
       (B) give priority to those State projects that the 
     Secretary determines have the greatest opportunity to succeed 
     in providing expanded health insurance coverage and in 
     providing children, youth, and vulnerable populations with 
     access to health care items and services; and
       (C) attempt to link allocations to the State to the meeting 
     of the goals and performance measures relating to health care 
     coverage and access, health care costs, health care outcomes 
     and vulnerable populations established under this Act through 
     the State project application process.
       (4) Maintenance of effort.--A State, in utilizing the 
     proceeds of a grant received under paragraph (1), shall 
     maintain the expenditures of the State for health care 
     coverage purposes at a level equal to not less than the level 
     of such expenditures maintained by the State for the fiscal 
     year preceding the fiscal year for which the grant is 
     received. The requirement of this paragraph shall not apply 
     in the case of a State that desires to alter health care 
     coverage funding levels within the scope of the State's 
     alternative health program.
       (5) Report.--At the end of the 5-year period beginning on 
     the date on which the Secretary awards the first grant under 
     paragraph (1), the State Health Reform Advisory Board 
     established under subsection (e)(1) shall prepare and submit 
     to the appropriate committees of Congress, a report on the 
     progress made by States receiving grants under paragraph (1) 
     in meeting the goals of expanded access, cost containment and 
     quality through performance measures established during the 
     5-year period of the grant. Such report shall contain the 
     recommendation of the Board concerning any future action that 
     Congress should take concerning health care reform, including 
     whether or not to extend the program established under this 
     subsection.
       (h) Local Government Applications.--
       (1) In general.--Where a State fails to submit an 
     application under this section, a unit of local government of 
     such State, or a consortium of such units of local 
     governments, may submit an application directly to the 
     Secretary for programs or projects under subsection (b). Such 
     an application shall be subject to the requirements of this 
     section.
       (2) Other applications.--Subject to such additional 
     guidelines as the Secretary may prescribe, a unit of local 
     government may submit an application under this section, 
     whether or not the State submits such an application, if such 
     unit of local government can demonstrate unique demographic 
     needs or a significant population size that warrants a 
     substate waiver under subsection (b).
       (i) Availability of Funds.--With respect to each of the 
     calendar years 1996 through 2000, $10,000,000,000 shall be 
     available for a calendar year to carry out this section from 
     the Health Care Reform Trust Fund established under section 
     9551(a)(2)(A) of the Internal Revenue Code of 1986. Amounts 
     made available in a calendar year under this paragraph and 
     not expended may be used in subsequent calendar years to 
     carry out this section.
       (j) Criminal Penalties for Acts Involving Medicare or State 
     Health Care Programs.--
       Section 1128B(b)(3) of the Social Security Act (42 U.S.C. 
     1320a-7b(b)(3)) is amended--
       (1) by striking ``and'' at the end of subparagraph (D);
       (2) by striking the period at the end of subparagraph (E) 
     and inserting ``; and''; and
       (3) by adding at the end the following new subparagraph:
       ``(F)(i) any premium payment made to a health insurer or 
     health maintenance organization by a State agency in 
     connection with 
     [[Page S1928]] a demonstration project operated under the 
     State medicaid program pursuant to section 1115 or the Health 
     Partnership Act of 1995 with respect to individuals 
     participating in such project; or
       ``(ii) any payment made by a health insurer or a health 
     maintenance organization to a sales representative or a 
     licensed insurance agent for the purpose of servicing, 
     marketing, or enrolling individuals participating in such 
     demonstration project in a health plan offered by such an 
     insurer or organization.''.
                         Subtitle B--State Laws

      PART A--EXISTING WAIVERS AND HAWAII PREPAID HEALTH CARE ACT

     SEC. 2101. CONTINUANCE OF EXISTING FEDERAL LAW WAIVERS.

       Nothing in this Act shall preempt any feature of a State 
     health care system operating under a waiver granted before 
     the date of the enactment of this Act under titles XVIII or 
     XIX of the Social Security Act (42 U.S.C. 1395 et seq. or 
     1396 et seq.) or under an exemption from preemption under 
     section 514(b) of the Employee Retirement Income Security Act 
     of 1974 (29 U.S.C. 1144(b)).
     SEC. 2102. PREEMPTION OF HAWAII PREPAID HEALTH CARE ACT.

       Section 514(b)(5) of the Employee Retirement Income 
     Security Act of 1974 (29 U.S.C. 1144(b)(5)) is amended to 
     read as follows:
       ``(5)(A) Except as provided in subparagraphs (B) and (C), 
     subsection (a) shall not apply to the Hawaii Prepaid Health 
     Care Act (Haw. Rev. Stat. Chapter 393, as amended) or any 
     insurance law of the State.
       ``(B) Nothing in subparagraph (A) shall be construed to 
     exempt from subsection (a) any State tax law relating to 
     employee benefits plans.
       ``(C) If the Secretary of Labor notifies the Governor of 
     the State of Hawaii that as the result of an amendment to the 
     Hawaii Prepaid Health Care Act enacted after the date of the 
     enactment of this paragraph--
       ``(i) the proportion of the population with health care 
     coverage under such Act is less than such proportion on such 
     date, or
       ``(ii) the level of benefit coverage provided under such 
     Act is less than the actuarial equivalent of such level of 
     coverage on such date,

     subparagraph (A) shall not apply with respect to the 
     application of such amendment to such Act after the date of 
     such notification.''.

                          PART B--ERISA REVIEW

     SEC. 2110. SPECIFIC EXEMPTION FROM ERISA PREEMPTION.

       (a) In General.--Section 514(b) of the Employee Retirement 
     Income Security Act of 1974 (29 U.S.C. 1144(b)) is amended by 
     adding at the end the following new paragraph:
       ``(9) Upon application by a State, subsection (a) shall not 
     apply to any State program that--
       ``(A) requires participation in an uncompensated care pool, 
     including a program which imposes a tax on health care 
     providers to fund an uncompensated care pool; or
       ``(B) provides for the imposition of a tax on health care 
     providers as permitted under section 1903(w) of the Social 
     Security Act.''
       (b) Effective Date.--The amendment made by this section 
     shall apply to applications filed on and after the date of 
     the enactment of this Act.

     SEC. 2111. DISCRETIONARY EXEMPTIONS FROM ERISA PREEMPTIONS.

       (a) In General.--Section 514(b) of the Employee Retirement 
     Income Security Act of 1974 (29 U.S.C. 1144(b)), as amended 
     by section 2110, is amended by adding at the end the 
     following new paragraph:
       ``(10) Upon application by a State, subsection (a) shall 
     not apply to any State program which the Secretary finds to 
     be a State program implementing an exemption from subsection 
     (a) established under section 2116 of the Health Partnership 
     Act of 1995.''
       (b) Effective Date.--The amendment made by subsection (a) 
     shall apply to applications filed on and after the date of 
     the enactment of this Act.

     SEC. 2112. PROCEDURES FOR ADOPTING DISCRETIONARY EXEMPTIONS.

       (a) Commission Recommendations.--The ERISA Review 
     Commission shall--
       (1) within 6 months after its establishment, make 
     recommendations to the Secretary of Labor with respect to the 
     issues described in subsection (c), and
       (2) within 18 months after its establishment, make 
     recommendations to the Secretary of Labor with respect to the 
     issues described in subsection (d).
       (b) Action by Secretary of Labor.--
       (1) In general.--The Secretary of Labor shall, within 6 
     months of the receipt of any recommendation under subsection 
     (a), implement the recommendation with or without 
     modification or notify the Commission that the Secretary does 
     not intend to implement the recommendation.
       (2) Notification.--The Secretary of Labor shall notify the 
     appropriate committees of Congress of its decisions under 
     this subsection.
       (3) Implementation.--If the Secretary of Labor decides to 
     implement any recommendation of the Commission, such 
     recommendation shall take effect on--
       (A) the 60th day after notification to the Congress under 
     paragraph (2), or
       (B) such later date as the Secretary of Labor determines 
     appropriate.
       (4) Failure to implement.--If the Secretary of Labor under 
     paragraph (1) elects not to implement the recommendations, 
     the Secretary shall include in the notification to Congress 
     under paragraph (2) the recommendations of the Commission.
       (c) Initial Issues To Be Acted Upon.--The issues described 
     in this subsection are as follows:
       (1) Uniform data collection.--The establishment of uniform 
     data collection with respect to use, cost, and quality 
     information and to require common claims processing.
       (2) Minimum benefits.--The authority of the States to 
     establish interim minimum benefits packages until the 
     implementation of any recommendation under subsection (d)(4), 
     including an exemption for self-insured plans which provide 
     benefits which are actuarially equivalent to the minimum 
     benefits package.
       (3) Minimum size.--The application of the preemption rules 
     only to self-insured employers which have more than a minimum 
     number of employees.
       (4) Managed care.--The authority of the States to regulate 
     the quality of managed care plans which contract with self-
     insured plans.
       (5) State health care financing programs.--The 
     establishment of State programs which--
       (i) provide for the imposition of a broad-based, 
     nondiscriminatory premium tax, or a broad-based, 
     nondiscriminatory tax on health services, the proceeds of 
     which are used to increase health insurance coverage of State 
     residents or to pay for the uncompensated care of such 
     residents, or
       (ii) provide for the imposition of a tax on employers to 
     provide for health care coverage of their employees, but only 
     if the program allows a credit to employers for health care 
     coverage provided by the employers to their employees.
       (6) Rate setting.--A requirement that the State participate 
     in a hospital reimbursement system or other system which sets 
     rates for health care providers in the State.
       (d) Other Issues.--The issues described in this subsection 
     are as follows:
       (1) Mandates.--The authority of States to require employers 
     to pay for or offer health benefits.
       (2) Remedies.--The authority of the Federal Government of 
     the States to provide remedies and consumer protections to 
     beneficiaries of self-insured plans.
       (3) Purchasing cooperatives.--The authority of the States 
     to require self-insured plans to participate in purchasing 
     cooperatives and risk adjustment systems.
       (4) Uniform benefits.--The development of a national 
     uniform benefits plan applicable to all health plans, 
     including self-insured plans.
       (5) Unresolved issues.--Those issues unresolved under 
     subsection (c).

     SEC. 2113. OPERATION OF THE COMMISSION.

       (a) Membership.--
       (1) In general.--The ERISA Review Commission shall be 
     composed of 17 members. Members shall be appointed not later 
     than 90 days after the date of the enactment of this Act.
       (2) Chairperson.--The President shall designate 1 
     individual described in paragraph (1) who shall serve as 
     Chairperson of the Commission.
       (b) Composition.--The membership of the Commission shall 
     include--
       (1) 9 individuals appointed by the President, 3 of whom 
     shall be Federal officials representing the Departments of 
     Labor, Health and Human Services, and the Treasury, 2 of whom 
     shall represent business, 2 of whom shall represent labor, 
     and 2 of whom shall represent State and local governments,
       (2) 4 appointed by the Majority Leader of the Senate, in 
     consultation with the Minority Leader, 2 of whom shall 
     represent business and 2 of whom shall represent State and 
     local governments, and
       (3) 4 appointed by the Majority Leader of the House of 
     Representatives, in consultation with the Minority Leader, 2 
     of whom shall represent business and 2 of whom shall 
     represent State and local governments.
       (c) Terms.--The terms of members of the Commission shall be 
     for the life of the Commission.
       (d) Vacancies.--
       (1) In general.--A vacancy in the Commission shall be 
     filled in the same manner as the original appointment.
       (2) No impairment of function.--A vacancy in the membership 
     of the Commission does not impair the authority of the 
     remaining members to exercise all of the powers of the 
     Commission.
       (3) Acting chairperson.--The Commission may designate a 
     member to act as Chairperson during any period in which there 
     is no Chairperson designated by the President.
       (e) Meetings; Quorum.--
       (1) Meetings.--The Chairperson shall preside at meetings of 
     the Commission, and in the absence of the Chairperson, the 
     Commission shall elect a member to act as Chairperson pro 
     tempore.
       (2) Quorum.--Nine members of the Commission shall 
     constitute a quorum thereof.
       (f) Administrative Provisions.--
       (1) Pay and travel expenses.--
       (A) Pay.--Each member shall be paid at a rate equal to the 
     daily equivalent of the minimum annual rate of basic pay 
     payable for level IV of the Executive Schedule under section 
     5315 of title 5, United States Code, for each day (including 
     travel time) during which the member is engaged in the actual 
     performance of duties vested in the Commission.
       (B) Travel expenses.--Members shall receive travel 
     expenses, including per diem in 
     [[Page S1929]] lieu of subsistence, in accordance with 
     sections 5702 and 5703 of title 5, United States Code.
       (2) Executive director.--
       (A) In general.--The Commission shall, without regard to 
     section 5311(b) of title 5, United States Code, appoint an 
     Executive Director.
       (B) Pay.--The Executive Director shall be paid at a rate 
     equivalent to a rate for the Senior Executive Service.
       (3) Staff.--
       (A) In general.--Subject to subparagraphs (B) and (C), the 
     Executive Director, with the approval of the Commission, may 
     appoint and fix the pay of additional personnel.
       (B) Pay.--The Executive Director may make such appointments 
     without regard to the provisions of title 5, United States 
     Code, governing appointments in the competitive service, and 
     any personnel so appointed may be paid without regard to the 
     provisions of chapter 51 and subchapter III of chapter 53 of 
     such title, relating to classification and General Schedule 
     pay rates, except that an individual so appointed may not 
     receive pay in excess of 120 percent of the annual rate of 
     basic pay payable for level GS-15 of the General Schedule.
       (C) Detailed personnel.--Upon request of the Executive 
     Director, the head of any Federal department or agency may 
     detail any of the personnel of that department or agency to 
     the Commission to assist the Commission in carrying out its 
     duties under this Act.
       (4) Other authority.--
       (A) Contract services.--The Commission may procure by 
     contract, to the extent funds are available, the temporary or 
     intermittent services of experts or consultants pursuant to 
     section 3109 of title 5, United States Code.
       (B) Leases and property.--The Commission may lease space 
     and acquire personal property to the extent funds are 
     available.
       (g) Authorization of Appropriations.--There are authorized 
     to be appropriated from the Fund established under section 
     9551 of the Internal Revenue Code of 1986, $1,000,000 for the 
     operation of the Commission.
       (h) Expiration.--The Commission shall terminate 2 years 
     after the date on which all of its members are appointed.
 TITLE III--PUBLIC HEALTH AND RURAL AND UNDERSERVED ACCESS IMPROVEMENT

     SEC. 3001. SHORT TITLE.

       This title may be cited as the ``Public Health and Rural 
     and Underserved Access Improvement Act of 1995''.

     SEC. 3002. ESTABLISHMENT OF NEW TITLE XXVII REGARDING PUBLIC 
                   HEALTH PROGRAMS.

       The Public Health Service Act (42 U.S.C. 201 et seq.) is 
     amended by adding at the end the following title:
           ``TITLE XXVII--PUBLIC HEALTH PROGRAMS IMPROVEMENT
         ``Subtitle A--Core Functions of Public Health Programs

                   ``PART 1--FORMULA GRANTS TO STATES

     ``SEC. 2711. AUTHORIZATIONS OF APPROPRIATIONS FROM FUND.

       ``For the purpose of carrying out this subtitle, there are 
     authorized to be appropriated from the Health Care Reform 
     Trust Fund established under section 9551(a)(2)(A) of the 
     Internal Revenue Code of 1986 (hereafter referred to in this 
     title as the ``Fund''), $200,000,000 for fiscal year 1996, 
     $350,000,000 for fiscal year 1997, $500,000,000 for fiscal 
     year 1998, $650,000,000 for fiscal year 1999, and 
     $700,000,000 for fiscal year 2000.

     ``SEC. 2712. FORMULA GRANTS TO STATES FOR CORE HEALTH 
                   FUNCTIONS.

       ``(a) In General.--In the case of each State that submits 
     to the Secretary an application in accordance with section 
     2715 for a fiscal year, the Secretary of Health and Human 
     Services, acting through the Director of the Centers for 
     Disease Control and Prevention, shall make a grant to the 
     State for carrying out the activities described in subsection 
     (c). The award shall consist of the allotment determined 
     under section 2716 for the State.
       ``(b) General Purpose.--The purpose of this subtitle is to 
     provide for improvements in the health status of the public 
     through carrying out the activities described in subsection 
     (b) toward attaining the Healthy People 2000 Objectives (as 
     defined in section 2799). A funding agreement for a grant 
     under subsection (a) is that--
       ``(1) the grant will be expended for such activities; and
       ``(2) the activities will be carried out by the State in 
     collaboration with local public health departments, health 
     education and training centers, neighborhood health centers, 
     and other community health providers.
       ``(c) Core Functions of Public Health Programs.--Subject to 
     the purpose described in subsection (b), the activities 
     referred to in subsection (a) are the following:
       ``(1) Data collection, and analytical activities, related 
     to population-based status and outcomes monitoring, including 
     the following:
       ``(A) The regular collection and analysis of public health 
     data (including the 10 leading causes of death and their 
     costs to society).
       ``(B) Vital statistics.
       ``(C) Personal health services data.
       ``(D) The supply and distribution of health professionals.
       ``(2) Activities to reduce environmental risk and to assure 
     the safety of housing, schools, workplaces, day-care centers, 
     food and water, including the following activities:
       ``(A) Monitoring the overall public health status and 
     safety of communities.
       ``(B) Assessing exposure to high lead levels and other 
     environmental contaminants; and activities for abatement of 
     toxicant hazards, including lead-related hazards.
       ``(C) Monitoring the quality of community water supplies 
     used for consumption or for recreational purposes.
       ``(D) Monitoring sewage and solid waste disposal, radiation 
     exposure, radon exposure, and noise levels.
       ``(E) Monitoring indoor and ambient air quality and related 
     risks to vulnerable populations.
       ``(F) Assuring recreation, worker, and school safety.
       ``(G) Enforcing public health safety and sanitary codes.
       ``(H) Monitoring community access to appropriate health 
     services.
       ``(I) Other activities relating to promoting and protecting 
     the public health of communities.
       ``(3) Investigation, control, and public-awareness 
     activities regarding adverse health conditions (such as 
     emergency treatment preparedness, community efforts to reduce 
     violence, outbreaks of communicable diseases within 
     communities, chronic disease and dysfunction exposure-related 
     conditions, toxic environmental pollutants, occupational and 
     recreational hazards, motor vehicle accidents, and other 
     threats to the health status of individuals).
       ``(4) Public information and education programs to reduce 
     risks to health (such as use of tobacco;, alcohol and other 
     drugs; unintentional injury from accidents, including motor 
     vehicle accidents; sexual activities that increase the risk 
     to HIV transmission and sexually transmitted diseases; poor 
     diet; physical inactivity; stress-related illness; mental 
     health problems; genetic disorders; and low childhood 
     immunization levels).
       ``(5) Provision of public health laboratory services to 
     complement private clinical laboratory services and that 
     screen for diseases and conditions (such as metabolic 
     diseases in newborns, provide assessments of blood lead 
     levels and other environmental toxicants, diagnose and 
     contact tracing of sexually transmitted diseases, 
     tuberculosis and other diseases requiring partner 
     notification, test for infectious and food-borne diseases, 
     and monitor the safety of water and food supplies).
       ``(6) Training and education of new and existing health 
     professionals in the field of public health, with special 
     emphasis on epidemiology, biostatistics, health education, 
     public health administration, public health nursing and 
     dentistry, environmental and occupational health sciences, 
     public health nutrition, social and behavioral health 
     sciences, operations research, and laboratory technology.
       ``(7) Leadership, policy development and administration 
     activities, including assessing needs and the supply and 
     distribution of health professionals; the setting of public 
     health standards; the development of community public health 
     policies; and the development of community public health 
     coalitions.
       ``(d) Restrictions on Use of Grant.--
       ``(1) In general.--A funding agreement for a grant under 
     subsection (a) for a State is that the grant will not be 
     expended--
       ``(A) to provide inpatient services;
       ``(B) to make cash payments to intended recipients of 
     health services;
       ``(C) to purchase or improve land, purchase, construct, or 
     permanently improve (other than minor remodeling) any 
     building or other facility, or purchase major medical 
     equipment;
       ``(D) to satisfy any requirement for the expenditure of 
     non-Federal funds as a condition for the receipt of Federal 
     funds; or
       ``(E) to provide financial assistance to any entity other 
     than a public or nonprofit private entity.
       ``(2) Limitation on administrative expenses.--A funding 
     agreement for a grant under subsection (a) is that the State 
     involved will not expend more than 20 percent of the grant 
     for administrative expenses with respect to the grant.
       ``(e) Maintenance of Effort.--A funding agreement for a 
     grant under subsection (a) is that the State involved will 
     maintain expenditures of non-Federal amounts for core health 
     functions at a level that is not less than the level of such 
     expenditures maintained by the State for the fiscal year 
     preceding the first fiscal year for which the State receives 
     such a grant.

     ``SEC. 2713. NUMBER OF FUNCTIONS; PLANNING.

       ``(a) Number of Functions.--Subject to subsection (b), a 
     funding agreement for a grant under section 2712 is that the 
     State involved will carry out each of the activities 
     described in subsection (c) of such section.
       ``(b) Planning.--In making grants under section 2712, the 
     Secretary shall for each State designate a period during 
     which the State is to engage in planning to meet the 
     responsibilities of the State under subsection (a). The 
     period so designated may not exceed 18 months. With respect 
     to such period for a State, a funding agreement for a grant 
     under section 2712 for any fiscal year containing any portion 
     of the period is that, during the period, the State will 
     expend the grant only for such planning.

     ``SEC. 2714. SUBMISSION OF INFORMATION; REPORTS.

       ``(a) Submission of Information.--The Secretary may make a 
     grant under section 2712 only if the State involved submits 
     to the Secretary the following information:
       ``(1) A description of the relationship between community 
     health providers, public 
     [[Page S1930]] and private health plans, and the public 
     health system of the State.
       ``(2) A description of existing deficiencies in the public 
     health system at the State level and the local level, using 
     standards under the Healthy People 2000 Objectives.
       ``(3) A description of public health priorities identified 
     at the State level and local levels, including the 10 leading 
     causes of death and their respective direct and indirect 
     costs to the State and the Federal Government.
       ``(4) Measurable outcomes and process objectives (using 
     criteria under the Healthy People 2000 Objectives) which 
     indicate improvements in health status as a result of the 
     activities carried out under section 2712(c).
       ``(5) Information regarding each such activity, which--
       ``(A) identifies the amount of State and local funding 
     expended on each such activity for the fiscal year preceding 
     the fiscal year for which the grant is sought; and
       ``(B) provides a detailed description of how additional 
     Federal funding will improve each such activity by both the 
     State and local public health agencies.
       ``(6) A description of activities under section 2712(c) to 
     be carried out at the local level, and a specification for 
     each such activity of--
       ``(A) the communities in which the activity will be carried 
     out and any collaborating agencies; and
       ``(B) the amount of the grant to be expended for the 
     activity in each community so specified.
       ``(7) A description of how such activities have been 
     coordinated with activities supported under title V of the 
     Social Security Act (relating to maternal and child health).
       ``(b) Reports.--A funding agreement for a grant under 
     section 2712 is that the States involved will, not later than 
     the date specified by the Secretary, submit to the Secretary 
     a report describing--
       ``(1) the purposes for which the grant was expended;
       ``(2) the health status of the population of the State, as 
     measured by criteria under the Healthy People 2000 
     Objectives; and
       ``(3) the progress achieved and obstacles encountered in 
     using uniform data sets under such Objectives.

     ``SEC. 2715. APPLICATION FOR GRANT.

       ``The Secretary may make a grant under section 2712 only if 
     an application for the grant is submitted to the Secretary, 
     the application contains each agreement described in this 
     part, the application contains the information required in 
     section 2712(c), and the application is in such form, is made 
     in such manner, and contains such agreements, assurances, and 
     information as the Secretary determines to be necessary to 
     carry out this part.

     ``SEC. 2716. DETERMINATION OF AMOUNT OF ALLOTMENT.

       ``For purposes of section 2712, the allotment under this 
     section for a State for a fiscal year shall be determined 
     through a formula established by the Secretary on the basis 
     of the population, economic indicators, and health status of 
     each State. Such allotment shall be the product of--
       ``(1) a percentage determined under the formula; and
       ``(2) the amount appropriated under section 2711 for the 
     fiscal year, less any amounts reserved under section 2717.

     ``SEC. 2717. ALLOCATIONS FOR CERTAIN ACTIVITIES.

       ``Of the amounts made available under section 2711 for a 
     fiscal year for carrying out this part, the Secretary may 
     reserve not more than 15 percent for carrying out the 
     following activities:
       ``(1) Technical assistance with respect to planning, 
     development, and operation of activities under section 
     2712(b), including provision of biostatistical and 
     epidemiological expertise, provision of laboratory expertise, 
     and the development of uniform data sets under the Health 
     People 2000 Objectives.
       ``(2) Development and operation of a national information 
     network among State and local health agencies for utilizing 
     such uniform data sets.
       ``(3) Program monitoring and evaluation of activities 
     carried out under section 2712(b).
       ``(4) Development of a unified electronic reporting 
     mechanism to improve the efficiency of administrative 
     management requirements regarding the provision of Federal 
     grants to State public health agencies.

  ``PART 2--COMPREHENSIVE EVALUATION OF DISEASE PREVENTION AND HEALTH 
                           PROMOTION PROGRAMS

     ``SEC. 2718. AUTHORIZATIONS OF APPROPRIATIONS FROM FUND.

       ``For the purpose of carrying out this part, there are 
     authorized to be appropriated from the Fund, $100,000,000 for 
     fiscal year 1996, and $150,000,000 for each of the fiscal 
     years 1997 through 2000.

     ``SEC. 2719. EVALUATION OF PROGRAMS.

       ``(a) Grants.--The Secretary may make grants to, or enter 
     into cooperative agreements or contracts with, eligible 
     entities for the purpose of enabling such entities to carry 
     out evaluations of the type described in subsection (c). The 
     Secretary shall carry out this section acting through the 
     Director of the Centers for Disease Control and Prevention, 
     subject to subsection (g).
       ``(b) Requirements.--
       ``(1) Eligible entities.--To be eligible to receive an 
     award of a grant, cooperative agreement, or contract under 
     subsection (a), an entity must--
       ``(A) be a public, nonprofit, or private entity or a 
     university;
       ``(B) prepare and submit to the Secretary an application at 
     such time, in such form, and containing such information as 
     the Secretary may require, including a plan for the conduct 
     of the evaluation under the grant;
       ``(C) provide assurances that any information collected 
     while conducting evaluations under this section will be 
     maintained in a confidential manner with respect to the 
     identities of the individuals from which such information is 
     obtained; and
       ``(D) meet any other requirements that the Secretary 
     determines to be appropriate.
       ``(2) Types of entities.--In making awards under subsection 
     (a), the Secretary shall consider applications from entities 
     proposing to conduct evaluations using community programs, 
     managed care programs, State and county health departments, 
     public education campaigns, school programs, and other 
     appropriate programs. The Secretary shall ensure that not 
     less than 25 percent of the amounts appropriated under 
     section 2718 for a fiscal year are used for making such 
     awards to entities that will use the amounts to conduct 
     evaluations in the workplace.
       ``(c) Use of Funds.--
       ``(1) Evaluations.--An award under subsection (a) shall be 
     used to--
       ``(A) conduct evaluations to determine the extent to which 
     clinical preventive services, health promotion and 
     unintentional injury prevention activities, and interpersonal 
     and community violence prevention activities, achieve short-
     term and long-term health care cost reductions and health 
     status improvement with respect to the Healthy People 2000 
     Objectives; and
       ``(B) evaluate other areas determined appropriate by the 
     Secretary.
       ``(2) Inclusion of certain population groups.--In carrying 
     out this section, the Secretary shall ensure that data 
     concerning women, children, minorities, older individuals 
     with different income levels, retirees, and individuals from 
     diverse geographical backgrounds, are obtained.
       ``(3) Minimum services.--The evaluations that the Secretary 
     may provide for under this section include (but are not 
     limited to) evaluations of programs that provide one or more 
     of the following services:
       ``(A) Blood pressure screening and control (to detect and 
     control hypertension and coronary health disease).
       ``(B) Early cancer screening.
       ``(C) Blood cholesterol screening and control.
       ``(D) Smoking cessation programs.
       ``(E) Substance abuse programs.
       ``(F) Dietary and nutrition counseling, including 
     nutrition.
       ``(G) Physical fitness counseling.
       ``(H) Stress management.
       ``(I) Diabetes education and screening.
       ``(J) Intraocular pressure screening.
       ``(K) Monitoring of prescription drug use.
       ``(L) Violence and injury prevention programs.
       ``(M) Health education.
       ``(N) Immunization rates.
       ``(4) Environmental data.--Evaluations conducted under this 
     section may consider the health effects and cost-
     effectiveness of certain environmental programs, including 
     fluoridation programs, traffic safety programs, pollution 
     control programs, accident prevention programs, and 
     antismoking programs.
       ``(5) Public policies.--Evaluations conducted under this 
     section may consider the effects of prevention-oriented 
     social and economic policies on improvement of health status 
     and their long-term cost effectiveness.
       ``(6) Use of existing data.--In conducting evaluations 
     under this section, entities shall use existing data and 
     health promotion and screening programs where practicable.
       ``(7) Cooperation.--In providing for an evaluation under 
     this section, the Secretary shall encourage the recipient of 
     the award and public and private entities with relevant 
     expertise (including State and local agencies) to collaborate 
     for purposes of conducting the evaluation.
       ``(d) Sites.--Recipients of awards under subsection (a) 
     shall select evaluation sites under the award that present 
     the greatest potential for new and relevant knowledge. Such 
     recipients, in selecting such sites, shall ensure that--
       ``(1) the sites provide evidence of pilot testing, process 
     evaluation, formative evaluation, availability assessment 
     strategies and results;
       ``(2) the sites provide evidence of a clear definition of 
     the program and protocols for the implementation of the 
     evaluation; and
       ``(3) the sites provide evidence of valid, appropriate and 
     feasible assessment methods and tools and a willingness to 
     use common data items and instruments across such sites.
       ``(e) Reporting Requirements.--Not later than 1 year after 
     an entity first receives an award under subsection (a), and 
     not less than once during each 1-year period thereafter for 
     which such an award is made to the entity, the entity shall 
     prepare and submit to the Secretary a report containing a 
     description of the activities under this section conducted 
     during the period for which the report is prepared, and the 
     findings derived as a result of such activities.
       ``(f) Term of Evaluations.--Evaluations conducted under 
     this section shall be for a period of not less than 3 years 
     and may continue as necessary to permit the grantee to 
     adequately measure the full benefit of the evaluations.
     [[Page S1931]]   ``(g) Dissemination and Guidelines.--
       ``(1) Consultation.--The Secretary shall carry out this 
     subsection acting through the Director of the Centers for 
     Disease Control and Prevention and the Administrator for 
     Health Care Policy and Research.
       ``(2) Guidelines.--The Secretary shall, where feasible and 
     practical, develop and issue practice guidelines that are 
     based on the results of evaluations conducted under this 
     section. The practice guidelines shall be developed by the 
     Secretary utilizing expert practitioners to assist in the 
     development and implementation of these guidelines.
       ``(3) Data.--
       ``(A) In general.--The Secretary shall collect, store, 
     analyze, and make available data related to the formulation 
     of the guidelines that is provided to the Centers for Disease 
     Control and Prevention by entities conducting evaluations 
     under this section.
       ``(B) Use of data.--The Secretary shall--
       ``(i) identify activities that prevent disease, illness, 
     injury and disability, and promote good health practices; 
     ascertain their cost-effectiveness; and identify their 
     potential to overall health status with respect to Healthy 
     People 2000 Objectives;
       ``(ii) disseminate practice guidelines to State and county 
     health departments, State insurance departments, insurance 
     companies, employers, professional medical organizations, and 
     others determined appropriate by the Secretary; and
       ``(iii) provide information with respect to recidivism 
     rates of participation in the evaluations.
       ``(4) Dissemination.--The Secretary may disseminate 
     information collected from evaluations under this section.
       ``(h) Limitation.--Amounts appropriated for carrying out 
     this section shall not be utilized to provide services.
``Subtitle B--Opportunities for Education and Training in Public Health

``PART 1--SCHOLARSHIP AND LOAN REPAYMENT PROGRAMS REGARDING SERVICE IN 
                        PUBLIC HEALTH POSITIONS

     ``SEC. 2721. AUTHORIZATIONS OF APPROPRIATIONS FROM FUND.

       ``For the purpose of carrying out this part, there are 
     authorized to be appropriated from the Fund, $50,000,000 for 
     each of the fiscal years 1996 through 2000.

     ``SEC. 2722. SCHOLARSHIP PROGRAM.

       ``(a) In General.--The Secretary, acting through the 
     Administrator of the Health Resources and Services 
     Administration and in consultation with the Director of the 
     Centers for Disease Control and Prevention, shall carry out a 
     program under which the Secretary awards scholarships to 
     individuals described in subsection (b) for the purpose of 
     assisting the individuals with the costs of attending public 
     and nonprofit private schools of public health (or other 
     public or nonprofit private institutions providing graduate 
     or specialized training in public health).
       ``(b) Eligible Individuals.--An individual referred to in 
     subsection (a) is any individual meeting the following 
     conditions:
       ``(1) The individual is enrolled (or accepted for 
     enrollment) at a school or other institution referred to in 
     subsection (a) as a full-time or part-time student in a 
     program providing training in a health profession in a field 
     of public health (including the fields of epidemiology, 
     biostatistics, environmental health, health administration 
     and planning, behavioral sciences, maternal and child health, 
     occupational safety, public health nursing, nutrition, and 
     toxicology).
       ``(2) The individual enters into the contract required 
     pursuant to subsection (d) as a condition of receiving the 
     scholarship (relating to an agreement to provide services in 
     approved public health positions, as defined in section 
     2724).
       ``(c) Eligible Schools.--For fiscal year 1996 and 
     subsequent fiscal years, the Secretary may make an award of a 
     scholarship under subsection (a) only if the Secretary 
     determines that--
       ``(1) the school or other institution with respect to which 
     the award is to be provided has coordinated the activities of 
     the school or institution with relevant activities of the 
     Health Resources and Services Administration and the Centers 
     for Disease Control and Prevention; and
       ``(2) not fewer than 60 percent of the graduates of the 
     school or institution are in public health positions 
     determined by the Secretary to be consistent with the needs 
     of the United States regarding such professionals.
       ``(d) Applicability of Certain Provisions.--Except as 
     inconsistent with this section or section 2724, the 
     provisions of subpart III of part D of title III (relating to 
     the Scholarship and Loan Repayment Programs of the National 
     Health Service Corps) apply to an award of a scholarship 
     under subsection (a) to the same extent and in the same 
     manner as such provisions apply to an award of a scholarship 
     under section 338A.

     ``SEC. 2723. LOAN REPAYMENT PROGRAM.

       ``(a) In General.--The Secretary, acting through the 
     Administrator of the Health Resources and Services 
     Administration and in consultation with the Director of the 
     Centers for Disease Control and Prevention, shall carry out a 
     program under which the Federal Government enters into 
     agreements to repay all or part of the educational loans of 
     individuals meeting the following conditions:
       ``(1) The individual involved is a graduate of a school or 
     other institution described in section 2722(a).
       ``(2) The individual meets the applicable legal 
     requirements to provide services as a public health 
     professional (including a professional in any of the fields 
     specified in section 2722(b)(1)).
       ``(3) The individual enters into the contract required 
     pursuant to subsection (b) as a condition of the Federal 
     Government repaying such loans (relating to an agreement to 
     provide services in approved public health positions, as 
     defined in section 2724).
       ``(b) Applicability of Certain Provisions.--Except as 
     inconsistent with this section or section 2724, the 
     provisions of subpart III of part D of title III (relating to 
     the Scholarship and Loan Repayment Programs of the National 
     Health Service Corps) apply to an agreement regarding 
     repayment under subsection (a) to the same extent and in the 
     same manner as such provisions apply to an agreement 
     regarding repayment under section 338B.
       ``(c) Amount of Repayments.--For each year for which an 
     individual contracts to serve in an approved public health 
     position pursuant to subsection (b), the Secretary may repay 
     not more than $20,000 of the principal and interest of the 
     educational loans of the individual.
     ``SEC. 2724. APPROVED PUBLIC HEALTH POSITIONS.

       ``(a) Position Regarding Populations With Significant Need 
     for Services.--
       ``(1) In general.--With respect to the programs under this 
     part, the obligated service of a program participant pursuant 
     to sections 2722(d) and 2723(b) shall be provided through an 
     assignment, to an entity described in subsection (b), for a 
     position in which the participant provides services as a 
     public health professional to a population determined by the 
     Secretary to have a significant unmet need for the services 
     of such a professional.
       ``(2) Period of service.--For purposes of sections 2722(d) 
     and 2723(d), the period of obligated service is the 
     following, as applicable to the program participant involved:
       ``(A) In the case of scholarships under section 2722 for 
     full-time students, the greater of--
       ``(i) 1 year for each year for which such a scholarship is 
     provided; or
       ``(ii) 2 years.
       ``(B) In the case of scholarships under section 2722 for 
     part-time students, a period determined by the Secretary on 
     the basis of the number of hours of education or training 
     received under the scholarship, considering the percentage 
     constituted by the ratio of such number to the number of 
     hours for a full-time student in the program involved.
       ``(C) In the case of the loan repayments under section 
     2723, such period as the Secretary and the participant may 
     agree, except that the period may not be less than 2 years.
       ``(b) Approval of Entities for Assignment of Program 
     Participants.--The entities referred to in subsection (a) are 
     public and nonprofit private entities approved by the 
     Secretary as meeting such requirements for the assignment of 
     a program participant as the Secretary may establish. The 
     entities that the Secretary may so approve include State and 
     local departments of health, public hospitals, community and 
     neighborhood health clinics, migrant health clinics, 
     community-based health-related organizations, certified 
     regional poison control centers, purchasing cooperatives 
     regarding health insurance, and any other public or nonprofit 
     private entity.
       ``(c) Definitions.--For purposes of this part:
       ``(1) The term `approved public health position', with 
     respect to a program participant, means a position to which 
     the participant is assigned pursuant to subsection (a).
       ``(2) The term `program participant' means an individual 
     who enters into a contract pursuant to section 2722(b)(2) or 
     2723(a)(3).

     ``SEC. 2725. ALLOCATION OF FUNDS; SPECIAL CONSIDERATIONS.

       ``(a) Allocations Regarding New Participants in Scholarship 
     Program.--Of the amounts appropriated under section 2721 for 
     a fiscal year, the Secretary shall obligate not less than 30 
     percent for the purpose of providing awards for scholarships 
     under section 2722 to individuals who have not previously 
     received such scholarships.
       ``(b) Special Consideration for Certain Individuals.--In 
     making awards of scholarships under section 2722 and making 
     repayments under section 2723, the Secretary shall give 
     special consideration to individuals who are in the armed 
     forces of the United States or who are veterans of the armed 
     forces.

       ``PART 2--EDUCATIONAL INSTITUTIONS REGARDING PUBLIC HEALTH

     ``SEC. 2731. AUTHORIZATIONS OF APPROPRIATIONS FROM FUND.

       ``For the purpose of carrying out this part from the Fund, 
     there are authorized to be appropriated from the Fund, 
     $100,000,000 for each of the fiscal years 1996 through 2000.

     ``SEC. 2732. GRANTS FOR EXPANDING CAPACITY OF INSTITUTIONS.

       ``(a) In General.--The Secretary may make grants to 
     institutions described in subsection (b) for the purpose of 
     expanding the educational capacities of the institutions 
     through recruiting and retaining faculty, curriculum 
     development, and coordinating the activities of the 
     institutions regarding education, training, and field 
     placements.
       ``(b) Relevant Institutions.--The institutions referred to 
     in subsection (a) are public and nonprofit private--
       ``(1) schools of public health;
     [[Page S1932]]   ``(2) departments of community and 
     preventive medicine that--
       ``(A) are within schools of medicine and schools of 
     osteopathic medicine; and
       ``(B) have established formal arrangements with schools of 
     public health in order to award joint degrees in public 
     health and another health profession; and
       ``(3) schools of nursing or dentistry that have established 
     formal arrangements with schools of public health in order to 
     carry out educational programs in public health at the 
     schools of nursing or dentistry, respectively.
       ``(c) Requirements Regarding Curriculum Development.--A 
     funding agreement for a grant under subsection (a) for an 
     institution is that, to the extent determined to be 
     appropriate by the Secretary, the curriculum of institution 
     will include the following:
       ``(1) Subject to subsection (d)(1), part-time nondegree 
     programs for public health professionals who need further 
     training in fields of public health.
       ``(2) With respect to the program of community health 
     advisors established in part 5 of subtitle E, a program to 
     train individuals to serve as supervisors under such part 
     (including training and evaluating the community health 
     advisors), which program is carried out in collaboration with 
     local public health departments and health education and 
     training centers.
       ``(d) Additional Requirements.--Funding agreements for a 
     grant under subsection (a) for an institution are as follows:
       ``(1) In developing the curriculum under the grant, the 
     institution will consult with the health departments in the 
     State involved, and will follow the relevant priorities of 
     such departments.
       ``(2) The institution will, as appropriate in the 
     determination of the Secretary, coordinate the activities of 
     the institution under the grant with relevant activities of 
     the Health Resources and Services Administration and the 
     Centers for Disease Control and Prevention.

     ``SEC. 2733. COORDINATION OF GRANT ACTIVITIES WITH NATIONAL 
                   PRIORITIES.

       ``The Secretary shall--
       ``(1) determine the needs of the United States regarding 
     the education and geographic distribution of public health 
     professionals;
       ``(2) determine priorities among such needs; and
       ``(3) in making grants under section 2732, ensure that the 
     curricula developed under such section, and the expertise of 
     the faculty recruited and retained under such section, are 
     consistent with such priorities.

     ``SEC. 2734. CERTAIN REQUIREMENTS FOR GRANTS.

       ``For fiscal year 1997 and subsequent fiscal years, the 
     Secretary may make a grant under section 2732 only if the 
     institution involved is in compliance with the following:
       ``(1) The institution has coordinated the activities of the 
     school or institution with relevant activities of the Health 
     Resources and Services Administration and the Centers for 
     Disease Control and Prevention.
       ``(2) A significant number of the faculty of the 
     institution has served as practitioners in public health.
       ``(3) The institution has consulted with public health 
     departments and public hospital systems in the State involved 
     in order to develop a curriculum that reflects the needs and 
     priorities of the State regarding the public health.
       ``(4) The institution has coordinated the activities of the 
     institution with the activities of the health departments and 
     of community groups.
       ``(5) The institution carries out a program for part-time 
     students to receive training in fields of public health.
       ``(6) Not less than 60 percent of the graduates of the 
     school or institution are in public health positions 
     determined by the Secretary to be consistent with the needs 
     of the United States regarding such professionals.

           ``PART 3--EXPANSION OF COMPETENCY IN PUBLIC HEALTH

     ``SEC. 2736. AUTHORIZATIONS OF APPROPRIATIONS FROM FUND.

       ``For the purpose of carrying out this section, there is 
     authorized to be appropriated from the Fund, $60,000,000 for 
     each of the fiscal years 1996 through 2000.

     ``SEC. 2737. GRANTS TO STATES.

       ``(a) States Lacking Adequate Training Programs.--
       ``(1) In general.--The Secretary may make grants to States 
     in which there is one or no program of training in a field of 
     public health but in which there are 1 or more schools of 
     medicine, osteopathic medicine, nursing, dentistry, social 
     work, pharmacy, or health administration. A funding agreement 
     for such a grant is that the purpose of the grant is for the 
     State involved to assist 1 or more of such schools in 
     developing and integrating public health curricula for the 
     schools.
       ``(2) Special considerations in making grants.--In making 
     grants under paragraph (1), the Secretary shall give special 
     consideration to States that agree to consult with 1 or more 
     schools of public health in carrying out the purpose 
     described in such subsection.
       ``(b) States With Nonaccredited Schools.--The Secretary may 
     make grants to States in which there are 1 or more 
     nonaccredited schools of public health. A funding agreement 
     for such a grant is that the purpose of the grant is for the 
     State involved to assist 1 or more of such schools in 
     improving the schools.
       ``(c) Amount of Grant; Limitation Regarding Individual 
     Educational Entities.--
       ``(1) Amount.--The amount of a grant under this section to 
     a State may not exceed $6,000,000.
       ``(2) Limitation.--A funding agreement for a grant under 
     this section for a State is that, with respect to the school 
     involved, the State will not provide more than 2 years of 
     assistance to the school from grants under this section.
                ``PART 4--AREA HEALTH EDUCATION CENTERS

     ``SEC. 2738. AUTHORIZATIONS OF APPROPRIATIONS FROM FUND.

       ``(a) Additional Funding.--For the purpose of carrying out 
     programs under section 746, there are authorized to be 
     appropriated from the Fund, $35,000,000 for each of the 
     fiscal years 1996 through 2000.
       ``(b) Relation to Other Funds.--The authorizations of 
     appropriations established in subsection (a) are in addition 
     to any other authorizations of appropriations that are 
     available for the purpose described in such subsection.

               ``PART 5--HEALTH EDUCATION TRAINING CENTER

     ``SEC. 2739. AUTHORIZATIONS OF APPROPRIATIONS FROM FUND.

       ``(a) Additional Funding.--For the purpose of carrying out 
     Health Education Training Center programs, there are 
     authorized to be appropriated from the Fund, $20,000,000 for 
     each of the fiscal years 1996 through 2000.
       ``(b) Relation to Other Funds.--The authorizations of 
     appropriations established in subsection (a) are in addition 
     to any other authorizations of appropriations that are 
     available for the purpose described in such subsection.
             ``Subtitle C--Regional Poison Control Centers

     ``SEC. 2741. AUTHORIZATIONS OF APPROPRIATIONS FROM FUND.

       ``For the purpose of carrying out this subtitle, there is 
     authorized to be appropriated from the Fund, $50,000,000 for 
     each of the fiscal years 1996 through 2000.

     ``SEC. 2742. GRANTS FOR REGIONAL CENTERS.

       ``(a) In General.--The Secretary may make grants to public 
     and nonprofit private entities for centers to carry out 
     activities regarding--
       ``(1) the prevention and treatment of poisoning; and
       ``(2) such other activities regarding the control of 
     poisons as the Secretary determines to be appropriate.
       ``(b) Regional Considerations.--In making grants under 
     subsection (a), the Secretary shall determine the need in 
     each of the principal geographic regions of the United States 
     for a center under such subsection, and shall make the grants 
     according to priorities established by the Secretary on the 
     basis of the extent of such need in each of the regions. In 
     carrying out the preceding sentence, the Secretary shall 
     ensure that no two centers receive grants for the same 
     geographic service area.
       ``(c) Matching Funds.--
       ``(1) In general.--With respect to the costs of an entity 
     in providing for centers under subsection (a), the Secretary 
     may make a grant under such subsection only if the State in 
     which the center is to operate, or other public entities in 
     the State, agree to make available (directly or through 
     donations from public or private entities) non-Federal 
     contributions toward such costs in an amount determined by 
     the Secretary.
       ``(2) Determination of amount contributed.--Non-Federal 
     contributions required under paragraph (1) may be in cash or 
     in kind, fairly evaluated, including plant, equipment, or 
     services. Amounts provided by the Federal Government, or 
     services assisted or subsidized to any significant extent by 
     the Federal Government, may not be included in determining 
     the amount of such non-Federal contributions.

     ``SEC. 2743. REQUIREMENTS REGARDING CERTIFICATION.

       ``(a) In General.--Subject to subsection (b), the Secretary 
     may make a grant under section 2742 only if the center 
     involved has been certified by a professional organization in 
     the field of poison control, and the Secretary has approved 
     the organization as having in effect standards for 
     certification that reasonably provide for the protection of 
     the public health with respect to poisoning. In carrying out 
     the preceding sentence, the Secretary shall consider the 
     standards established by the American Association of Poison 
     Control Centers.
       ``(b) Temporary Waiver.--The Secretary may waive the 
     requirement of subsection (a) for a center for a period not 
     exceeding 1 year.

     ``SEC. 2744. GENERAL PROVISIONS.

       ``(a) Duration of Grant.--The period during which payments 
     are made under a grant under section 2742 may not exceed 3 
     years. The provision of such payments is subject to annual 
     approval by the Secretary of the payments and subject to the 
     availability of appropriations for the fiscal year involved 
     to make the payments. The preceding sentence may not be 
     construed as establishing a limitation on the number of such 
     grants that may be made to an entity.
       ``(b) Study Regarding Need for Centers.--
       ``(1) In general.--The Secretary shall conduct a study of 
     each of the centers for which a grant under section 2742 has 
     been provided. 
     [[Page S1933]] The purpose of the study shall be to determine 
     the effectiveness of the centers in carrying out the 
     activities described in such section and the extent to which 
     the activities have been carried out in a cost-effective 
     manner.
       ``(2) Alternatives to centers.--In carrying out the study 
     under paragraph (1), the Secretary shall determine the extent 
     to which the activities described in section 2742 can be 
     effectively carried out through means other than centers 
     under such section. The alternative means considered by the 
     Secretary under the preceding sentence shall include the 
     alternative of requiring public and private health plans to 
     carry out such activities.
       ``(3) Date certain for completion.--Not later than November 
     1, 1996, the Secretary shall submit to the Congress a report 
     describing the findings made in the study under paragraph 
     (1).
       ``(4) Notice to centers.--Not later than February 1, 1997, 
     the Secretary shall notify each grantee under section 2742 
     whether the Secretary considers the continued operation of 
     the center involved to be necessary in meeting the needs of 
     the geographic region involved for the activities described 
     in such section.
              ``Subtitle D--School-Related Health Services

     ``SEC. 2746. AUTHORIZATION OF APPROPRIATIONS FROM FUND.

       ``(a) Funding for School-Related Health Services.--For the 
     purpose of carrying out this subtitle, there are authorized 
     to be appropriated from the Fund, $100,000,000 for fiscal 
     year 1996, $200,000,000 for fiscal year 1997, $300,000,000 
     for fiscal year 1998, $400,000,000 for fiscal year 1999, and 
     $500,000,000 for fiscal year 2000.
       ``(b) Funding for Planning and Development Grants.--Of 
     amounts made available under this section, not to exceed 
     $10,000,000 for each of fiscal years 1996 and 1997 may be 
     utilized to carry out section 2749.

     ``SEC. 2747. ELIGIBILITY FOR GRANTS.

       ``(a) In General.--
       ``(1) Planning and development grants.--Entities eligible 
     to apply for and receive grants under section 2749 are--
       ``(A) State health agencies that apply on behalf of local 
     community partnerships; or
       ``(B) local community partnerships in States in which 
     health agencies have not successfully applied.
       ``(2) Operational grants.--Entities eligible to apply for 
     and receive grants under section 2750 are--
       ``(A) a qualified State as designated under subsection (c) 
     that apply on behalf of local community partnerships; or
       ``(B) local community partnerships in States that are not 
     designated under subparagraph (A).
       ``(b) Local Community Partnerships.--
       ``(1) In general.--A local community partnership under 
     subsection (a)(1)(B) and (a)(2)(B) is an entity that, at a 
     minimum includes--
       ``(A) a local health care provider, which may be a local 
     public health department, with experience in delivering 
     services to children and youth or medically underserved 
     populations;
       ``(B) local educational agency on behalf of one or more 
     public schools; and
       ``(C) one community based organization located in the 
     community to be served that has a history of providing 
     services to at-risk children and youth.
       ``(2) Rural communities.--In rural communities, local 
     partnerships should seek to include, to the fullest extent 
     practicable, providers and community based organizations with 
     experience in serving the target population.
       ``(3) Parent and community participation.--An applicant 
     described in subsection (a) shall, to the maximum extent 
     feasible, involve broad-based community participation 
     (including parents of the youth to be served).
       ``(c) Qualified State.--A qualified State under subsection 
     (a)(2)(A) is a State that, at a minimum--
       ``(1) demonstrates an organizational commitment (including 
     a strategic plan) to providing a broad range of health, 
     health education and support services to at-risk youth; and
       ``(2) has a memorandum of understanding or cooperative 
     agreement jointly entered into by the State agencies 
     responsible for health and education regarding the planned 
     delivery of health and support services in school-based or 
     school-linked centers.

     ``SEC. 2748. PREFERENCES.

       ``In making grants under sections 2749 and 2750, the 
     Secretary shall give priority to applicants whose-communities 
     to be served show the most substantial level of need for 
     health services among children and youth.
     ``SEC. 2749. PLANNING AND DEVELOPMENT GRANTS.

       ``(a) In General.--The Secretary may make grants during 
     fiscal years 1996 and 1997 to entities eligible under section 
     2747 to develop school-based or school-linked health service 
     sites.
       ``(b) Use of Funds.--Amounts provided under a grant under 
     this section may be used for the following:
       ``(1) Planning for the provision of school health services, 
     including--
       ``(A) an assessment of the need for health services among 
     youth in the communities to be served;
       ``(B) the health services to be provided and how new 
     services will be integrated with existing services;
       ``(C) assessing and planning for the modernization and 
     expansion of existing facilities and equipment to accommodate 
     such services; and
       ``(D) an affiliation with relevant health plans.
       ``(2) Recruitment and training of staff for the 
     administration and delivery of school health services.
       ``(3) The establishment of local community partnerships as 
     described in section 2747(b).
       ``(4) In the case of States, the development of memorandums 
     of understanding or cooperative agreements for the 
     coordinated delivery of health and support services through 
     school health service sites.
       ``(5) Other activities necessary to assume operational 
     status.
       ``(c) Application for Grants.--To be eligible to receive a 
     grant under this section an entity described in section 
     2747(a) shall submit an application in a form and manner 
     prescribed by the Secretary.
       ``(d) Number of Grants.--Not more than one planning grant 
     may be made to a single applicant. A planning grant may not 
     exceed 2 years in duration.
       ``(e) Amount Available for Development Grant.--The 
     Secretary may award not to exceed--
       ``(1) $150,000 to entities under section 2747(a)(1)(A) and 
     to localities planning for a citywide or countywide school 
     health services delivery system; and
       ``(2) $50,000 to entities under section 2747(a)(1)(B).

     ``SEC. 2759. GRANTS FOR OPERATION OF SCHOOL HEALTH SERVICES.

       ``(a) In General.--The Secretary may make grants to 
     eligible entities described in section 2747(a)(2) that submit 
     applications consistent with the requirements of this 
     section, to pay the cost of operating school-based or school-
     linked health service sites.
       ``(b) Use of Grant.--Amounts provided under a grant under 
     this section may be used for the following--
       ``(1) health services, including diagnosis and treatment of 
     simple illnesses and minor injuries;
       ``(2) preventive health services, including health 
     screenings follow-up health care, mental health, and 
     preventive health education;
       ``(3) enabling services and other necessary support 
     services;
       ``(4) training, recruitment, and compensation of health 
     professionals and other staff necessary for the 
     administration and delivery of school health services; and
       ``(5) referral services, including the linkage of 
     individuals to health plans, and community-based health and 
     social service providers.
       ``(c) Application for Grant.--To be eligible to receive a 
     grant under this section an entity described in section 
     2747(a)(2) shall submit an application in a form and manner 
     prescribed by the Secretary. In order to receive a grant 
     under this section, an applicant must include in the 
     application the following information--
       ``(1) a description of the services to be furnished by the 
     applicant;
       ``(2) the amounts and sources of funding that the applicant 
     will expend, including estimates of the amount of payments 
     the applicant will receive from health plans and other 
     sources;
       ``(3) a description of local community partnerships, 
     including parent and community participation;
       ``(4) a description of the linkages with other health and 
     social service providers; and
       ``(5) such other information as the Secretary determines to 
     be appropriate.
       ``(d) Assurances.--In order to receive a grant under this 
     section, an applicant must meet the following conditions--
       ``(1) school health service sites will, directly or 
     indirectly, provide a broad range of health services, in 
     accordance with the determinations of the local community 
     partnership, that may include--
       ``(A) diagnosis and treatment of simple illnesses and minor 
     injuries;
       ``(B) preventive health services, including health 
     screenings and follow-up health care, mental health and 
     preventive health education;
       ``(C) enabling services; and
       ``(D) referrals (including referrals regarding mental 
     health and substance abuse) with follow-up to ensure that 
     needed services are received;
       ``(2) the applicant provides services recommended by the 
     health provider, in consultation with the local community 
     partnership, and with the approval of the local education 
     agency;
       ``(3) the applicant provides the services under this 
     subsection to adolescents, and other school age children and 
     their families as deemed appropriate by the local 
     partnership;
       ``(4) the applicant maintains agreements with community-
     based health care providers with a history of providing 
     services to such populations for the provision of health care 
     services not otherwise provided directly or during the hours 
     when school health services are unavailable;
       ``(5) the applicant establishes an affiliation with 
     relevant health plans and will establish reimbursement 
     procedures and will make every reasonable effort to collect 
     appropriate reimbursement for services provided;
       ``(6) the applicant agrees to supplement and not supplant 
     the level of State or local funds under the direct control of 
     the applying State or participating local education or 
     [[Page S1934]] health authority expended for school health 
     services as defined by this Act;
       ``(7) services funded under this Act will be coordinated 
     with existing school health services provided at a 
     participating school; and
       ``(8) for applicants in rural areas, the assurances 
     required under paragraph (4) shall be fulfilled to the 
     maximum extent possible.
       ``(e) State Laws.--Notwithstanding any other provision in 
     this subtitle, no school based health clinic may provide 
     services, to any minor, when to do so is a violation of State 
     laws or regulations pertaining to informed consent for 
     medical services to minors.
       ``(f) Limitation on Administrative Funds.--In the case of a 
     State applying on behalf of local educational partnerships, 
     the applicant may retain not more than 5 percent of grants 
     awarded under this subpart for administrative costs.
       ``(g) Duration of Grant.--A grant under this section shall 
     be for a period determined appropriate by the Secretary.
       ``(h) Amount of Grant.--The annual amount of a grant 
     awarded under this section shall not be more than $200,000 
     per school-based or school-linked health service site.
       ``(i) Federal Share.--
       ``(1) In general.--Subject to paragraph (3), a grant for 
     services awarded under this section may not exceed--
       ``(A) 90 percent of the non-reimbursed cost of the 
     activities to be funded under the program for the first 2 
     fiscal years for which the program receives assistance under 
     this section; and
       ``(B) 75 percent of the non-reimbursed cost of such 
     activities for subsequent years for which the program 
     receives assistance under this section.

     The remainder of such costs shall be made available as 
     provided in paragraph (2).
       ``(2) Form of non-federal share.--The non-Federal share 
     required by paragraph (1) may be in cash or in-kind, fairly 
     evaluated, including facilities, equipment, personnel, or 
     services, but may not include amounts provided by the Federal 
     Government. In-kind contributions may include space within 
     school facilities, school personnel, program use of school 
     transportation systems, outposted health personnel, and 
     extension of health provider medical liability insurance.
       ``(3) Waiver.--The Secretary may waive the requirements of 
     paragraph (1) for any year in accordance with criteria 
     established by regulation. Such criteria shall include a 
     documented need for the services provided under this section 
     and an inability of the grantee to meet the requirements of 
     paragraph (1) despite a good faith effort.
       ``(j) Training and Technical Assistance.--Entities that 
     receive assistance under this section may use not to exceed 
     10 percent of the amount of such assistance to provide staff 
     training and to secure necessary technical assistance. To the 
     maximum extent feasible, technical assistance should be 
     sought through local community-based entities. The limitation 
     contained in this subsection shall apply to individuals 
     employed to assist in obtaining funds under this subtitle. 
     Staff training should include the training of teachers and 
     other school personnel necessary to ensure appropriate 
     referral and utilization of services, and appropriate 
     linkages between class-room activities and services offered.
       ``(k) Report and Monitoring.--The Secretary will submit to 
     the Committee on Labor and Human Resources in the Senate and 
     the Committee on Commerce in the House of Representatives a 
     biennial report on the activities funded under this Act, 
     consistent with the ongoing monitoring activities of the 
     Department. Such reports are intended to advise the relevant 
     Committees of the availability and utilization of services, 
     and other relevant information about program activities.
``Subtitle E--Expansion of Rural and Underserved Areas Access to Health 
                                Services

             ``PART 1--COMMUNITY AND MIGRANT HEALTH CENTERS

     ``SEC. 2756. AUTHORIZATIONS OF APPROPRIATIONS FROM FUND.

       ``(a) In General.--For the purpose of carrying out this 
     part, there is authorized to be appropriated from the Fund, 
     $100,000,000 for each of the fiscal years 1996 through 2000.
       ``(b) Relation to Other Funds.--The authorizations of 
     appropriations established in subsection (a) for the purpose 
     described in such subsection are in addition to any other 
     authorizations of appropriations that are available for such 
     purpose.

     ``SEC. 2757. GRANTS TO COMMUNITY AND MIGRANT HEALTH CENTERS.

       ``(a) In General.--The Secretary shall make grants in 
     accordance with this section to migrant health centers and 
     community health centers.
       ``(b) Use of Funds.--
       ``(1) Development, operation, and other purposes regarding 
     centers.--Subject to paragraph (2), grants under subsection 
     (a) to migrant health centers and community health centers 
     may be made only in accordance with the conditions upon which 
     grants are made under sections 329 and 330, respectively.
       ``(2) Required financial reserves.--The Secretary may 
     authorize migrant health centers and community health centers 
     to expend a grant under subsection (a) to establish and 
     maintain financial reserves required for purposes of health 
     plans.
       ``(c) Definitions.--For purposes of this subtitle, the 
     terms `migrant health center' and `community health center' 
     have the meanings given such terms in sections 329(a)(1) and 
     330(a), respectively.
                ``PART 2--NATIONAL HEALTH SERVICE CORPS

     ``SEC. 2781. AUTHORIZATIONS OF APPROPRIATIONS FROM FUND.

       ``(a) Additional Funding; General Corps Program; 
     Allocations Regarding Nurses.--For the purpose of carrying 
     out subpart II of part D of title III, and for the purpose of 
     carrying out subsection (c), there are authorized to be 
     appropriated from the Fund, $100,000,000 for each of the 
     fiscal years 1996 through 2000.
       ``(b) Relation to Other Funds.--The authorizations of 
     appropriations established in subsection (a) are in addition 
     to any other authorizations of appropriations that are 
     available for the purpose described in such subsection.
       ``(c) Allocation for Participation of Nurses in Scholarship 
     and Loan Repayment Programs.--Of the amounts appropriated 
     under subsection (a), the Secretary shall reserve such 
     amounts as may be necessary to ensure that, of the aggregate 
     number of individuals who are participants in the Scholarship 
     Program under section 338A, or in the Loan Repayment Program 
     under section 338B, the total number who are being educated 
     as nurses or are serving as nurses, respectively, is 
     increased to 30 percent.
       ``(d) Availability of Funds.--An appropriation under this 
     section for any fiscal year may be made at any time before 
     that fiscal year and may be included in an Act making an 
     appropriation under an authorization under subsection (a) for 
     another fiscal year; but no funds may be made available from 
     any appropriation under this section for obligation under 
     sections 331 through 335, section 336A, and section 337 
     before the fiscal year involved.

       ``PART 3--SATELLITE CLINICS REGARDING PRIMARY HEALTH CARE

     ``SEC. 2783. AUTHORIZATION OF APPROPRIATIONS FROM FUND.

       ``For the purpose of carrying out this part, there is 
     authorized to be appropriated from the Fund, $50,000,000 for 
     each of the fiscal years 1996 through 2000.

     ``SEC. 2783A. GRANTS TO STATES FOR DEVELOPMENT AND OPERATION 
                   OF SATELLITE CLINICS.

       ``(a) In General.--With respect to outpatient health 
     centers that are providers of comprehensive health services, 
     the Secretary may make grants to States for the purpose of 
     assisting such centers in developing or operating facilities 
     that--
       ``(1) provide clinical preventive services, treatment of 
     minor illnesses and injuries, family planning services, and 
     referrals for health services, mental health services, and 
     health-related social services; and
       ``(2) are located at a distance from the center sufficient 
     to increase the extent to which individuals in the geographic 
     area involved have access to the services specified in 
     paragraph (1).
       ``(b) Certain Requirements.--The Secretary may make a grant 
     under subsection (a) only if the State agrees that the health 
     facility for which the grant is made, once in operation, will 
     meet the following conditions:
       ``(1) The clinical preventive services provided by the 
     facility will include routine preventive services, including 
     family planning services, for pregnant and postpartum women 
     and for children, including health screenings and 
     immunizations.
       ``(2) The principal providers of health services at the 
     facility, and the principal managers of the facility, will be 
     nurse practitioners, physician assistants, or nurse 
     clinicians, subject to applicable law.
       ``(3) The outpatient health center operating the facility 
     will serve as a referral center for physician services and 
     will provide for the ongoing monitoring of the activities of 
     the facility.
       ``(c) Matching Funds.--The Secretary may make a grant under 
     subsection (a) only if the State involved agrees to make non-
     Federal contributions toward the costs of developing and 
     operating the health facilities involved.
       ``(d) Application for Grant.--The Secretary may make a 
     grant under subsection (a) only if an application for the 
     grant is submitted to the Secretary and the application is in 
     such form, is made in such manner, and contains such 
     agreements, assurances, and information as the Secretary 
     determines to be necessary to carry out this part.
       ``(e) Limitation on Amount of Assistance Per Facility.--
     With respect to a health facility for which one or more 
     grants under subsection (a) are made, the Secretary may not 
     provide more than an aggregate $250,000 for the development 
     and operation of the facility.

                  ``PART 4--COMMUNITY HEALTH ADVISORS

     ``SEC. 2784. AUTHORIZATION OF APPROPRIATIONS FROM FUND.

       ``For the purpose of carrying out this part, there is 
     authorized to be appropriated from the Fund, $100,000,000 for 
     each of the fiscal years 1996 through 2000.

     ``SEC. 2785. FORMULA GRANTS REGARDING COMMUNITY HEALTH 
                   ADVISOR PROGRAMS.

       ``(a) Formula Grants.--
       ``(1) In general.--In the case of each State (or entity 
     designated by a State under subsection (b)) that submits to 
     the Secretary an application in accordance with section 2788 
     for a fiscal year, the Secretary of Health and 
     [[Page S1935]] Human Services, acting through the Director of 
     the Centers for Disease Control and Prevention and in 
     coordination with the heads of the agencies specified in 
     paragraph (2), shall make an award of financial assistance to 
     the State or entity for the development and operation of 
     community health advisor programs under section 2786(b). The 
     award shall consist of the allotment determined under section 
     2789 with respect to the State, subject to section 2794.
       ``(2) Coordination with other agencies.--The agencies 
     referred to in paragraph (1) regarding coordination are the 
     Health Resources and Services Administration, the National 
     Institutes of Health, the Substance Abuse and Mental Health 
     Services Administration, and the Health Education and 
     Training Center.
       ``(b) Designated Entities.--With respect to the State 
     involved, an entity other than the State may receive an award 
     under subsection (a) only if the entity--
       ``(1) is a public or nonprofit private academic 
     organization (or other public or nonprofit private entity); 
     and
       ``(2) has been designated by the State to carry out the 
     purpose described in such subsection in the State and to 
     receive amounts under such subsection in lieu of the State.
       ``(c) Role of State Agency for Public Health.--A funding 
     agreement for an award under subsection (a) is that--
       ``(1) if the applicant is a State, the award will be 
     administered by the State agency with the principal 
     responsibility for carrying out public health programs; and
       ``(2) if the applicant is an entity designated under 
     subsection (b), the award will be administered in 
     consultation with such State agency.
       ``(d) Statewide Responsibilities; Limitation on 
     Expenditures.--
       ``(1) Statewide responsibilities.--A funding agreement for 
     an award under subsection (a) is that the applicant involved 
     will--
       ``(A) operate a clearinghouse to maintain and disseminate 
     information on community health advisor programs (and similar 
     programs) in the State, including information on developing 
     and operating such programs, on training individuals to 
     participate in the programs, and on evaluation of the 
     programs;
       ``(B) collaborate with schools of public health to provide 
     to community health advisor programs in the State technical 
     assistance in training and supervising community health 
     advisors under section 2787(g)(1); and
       ``(C) coordinate the activities carried out in the State 
     under the award, including coordination between the various 
     community health advisor programs and coordination between 
     such programs and related activities of the State and of 
     other public or private entities.
       ``(2) Limitation.--A funding agreement for an award under 
     subsection (a) is that the applicant involved will not expend 
     more than 15 percent of the award in the aggregate for 
     carrying out paragraph (1) and for the expenses of 
     administering the award with respect to the State involved, 
     including the process of receiving payments from the 
     Secretary under the award, allocating the payments among the 
     entities that are to develop and operate the community health 
     advisor programs involved, and monitoring compliance with the 
     funding agreements made under this subtitle by the applicant.

     ``SEC. 2786. REQUIREMENTS REGARDING COMMUNITY HEALTH ADVISOR 
                   PROGRAMS.

       ``(a) Purpose of Award; Healthy People 2000 Objectives.--
       ``(1) In general.--Subject to paragraph (2), a funding 
     agreement for an award under section 2785 for an applicant is 
     that the purpose of the award is, through community health 
     advisor programs under subsection (b), to assist the State 
     involved in attaining the Healthy People 2000 Objectives.
       ``(2) Authority regarding selection of priority 
     objectives.--With respect to compliance with the agreement 
     made under paragraph (1), an applicant receiving an award 
     under section 2785 may, from among the various Healthy People 
     2000 Objectives, select one or more Objectives to be given 
     priority in the operation of a community health advisor 
     program of the applicant, subject to the applicant selecting 
     such priorities in consultation with the entity that is to 
     carry out the program and the local health department 
     involved.
       ``(b) Requirements for Programs.--
       ``(1) In general.--A funding agreement for an award under 
     section 2785 for an applicant is that, in expending the 
     award, the purpose described in subsection (a)(1) will be 
     carried out in accordance with the following:
       ``(A) For each community for which the purpose is to be 
     carried out, the applicant will establish a program in 
     accordance with this subsection.
       ``(B) The program will be carried out in a community only 
     if the applicant has, under section 2787(a), identified the 
     community as having a significant need for the program.
       ``(C) The program will be operated by a public or nonprofit 
     private entity with experience in providing health or health-
     related social services to individuals who are underserved 
     with respect to such services.
       ``(D) The services of the program, as specified in 
     paragraph (2), will be provided principally by community 
     health advisors (as defined in subsection (d)).
       ``(2) Authorized program services.--For purposes of 
     paragraph (1)(D), the services specified in this paragraph 
     for a program are as follows:
       ``(A) The program will collaborate with health care 
     providers and related entities in order to facilitate the 
     provision of health services and health-related social 
     services (including collaborating with local health 
     departments, community health centers, public hospital 
     systems, migrant health centers, rural health clinics, 
     hospitals, physicians and nurses, providers of health 
     education, pre-school facilities for children, elementary and 
     secondary schools, and providers of social services).
       ``(B) The program will provide public education on health 
     promotion and on the prevention of diseases, illnesses, 
     injuries, and disabilities, and will facilitate the 
     appropriate use of available health services and health-
     related social services.
       ``(C) The program will provide health-related counseling.
       ``(D) The program will provide referrals for available 
     health services and health-related social services.
       ``(E) For the purpose of increasing the capacity of 
     individuals to utilize health services and health-related 
     social services under Federal, State, and local programs, the 
     following conditions will be met:
       ``(i) The program will assist individuals in establishing 
     eligibility under the programs and in receiving the services 
     or other benefits of the programs.
       ``(ii) The program will provide such other services as the 
     Secretary determines to be appropriate, which services may 
     include (but are not limited to) transportation and 
     translation services.
       ``(F) The program will provide outreach services to inform 
     the community of the availability of the services of the 
     program.
       ``(c) Priority for Medically Underserved Communities.--A 
     funding agreement for an award under section 2785 is that the 
     applicant involved will give priority to developing and 
     operating community health advisor programs for medically 
     underserved communities.
       ``(d) Definition of Community Health Advisor.--For purposes 
     of this part, the term `community health advisor' means an 
     individual--
       ``(1) who has demonstrated the capacity to carry out one or 
     more of the authorized program services;
       ``(2) who, for not less than 1 year, has been a resident of 
     the community in which the community health advisor program 
     involved is to be operated; and
       ``(3) is a member of a socioeconomic group to be served by 
     the program.

     ``SEC. 2787. ADDITIONAL AGREEMENTS.

       ``(a) Identification of Community Needs.--A funding 
     agreement for an award under section 2785 is that the 
     applicant involved will--
       ``(1) identify the needs of the community involved for the 
     authorized program services, including the identifying the 
     resources of the community that are available for carrying 
     out the program;
       ``(2) in identifying such needs, consult with members of 
     the community, with individuals and programs that provide 
     health services in the community, and with individuals and 
     programs that provide health-related social services in the 
     community; and
       ``(3) consider such needs in carrying out a community 
     health advisor program for the community.
       ``(b) Matching Funds.--
       ``(1) In general.--With respect to the cost of carrying out 
     a community health advisor program, a funding agreement for 
     an award under section 2785 is that the applicant involved 
     will make available (directly or through donations from 
     public or private entities) non-Federal contributions toward 
     such cost in an amount that is not less than 25 percent of 
     such cost.
       ``(2) Determination of amount contributed.--
       ``(A) Non-Federal contributions required in paragraph (1) 
     may be in cash or in kind, fairly evaluated, including plant, 
     equipment, or services. Amounts provided by the Federal 
     Government, or services assisted or subsidized to any 
     significant extent by the Federal Government, may not be 
     included in determining the amount of such non-Federal 
     contributions.
       ``(B) With respect to the State in which the community 
     health advisor program involved is to be carried out, amounts 
     provided by the State in compliance with subsection (c) shall 
     be included in determining the amount of non-Federal 
     contributions under paragraph (1).
       ``(c) Maintenance of Effort.--With respect to the purposes 
     for which an award under section 2785 is authorized in this 
     subtitle to be expended, the Secretary may make such an award 
     only if the State involved agrees to maintain expenditures of 
     non-Federal amounts for such purposes at a level that is not 
     less than the level of such expenditures maintained by the 
     State for the fiscal year preceding the first fiscal year for 
     which such an award is made with respect to the State.
       ``(d) Cultural Context of Services.--A funding agreement 
     for an award under section 2785 for an applicant is that the 
     services of the community health advisor program involved 
     will be provided in the language and cultural context most 
     appropriate for the individuals served by the program, and 
     that for such purpose the community health advisors of the 
     program will include an appropriate number of advisors who 
     are fluent in both English and not less than one of the other 
     relevant languages.
       ``(e) Number of Programs Per Award; Programs for Urban and 
     Rural Areas.--A 
     [[Page S1936]] funding agreement for an award under section 
     2785 for an applicant is that the number of community health 
     advisor programs operated in the State with the award will be 
     determined by the Secretary, except that (subject to section 
     2786(b)(1)(B)) such a program will be carried out in not less 
     than one urban area of the State, and in not less than one 
     rural area of the State.
       ``(f) Ongoing Supervision of Advisors.--A funding agreement 
     for an award under section 2785 is that the applicant 
     involved will ensure that each community health advisor 
     program operated with the award provides for the ongoing 
     supervision of the community health advisors of the program, 
     and that the individuals serving as supervisors in the 
     program will include 1 or more public health nurses with 
     field experience and managerial experience.
       ``(g) Certain Expenditures.--
       ``(1) Training; continuing education.--Funding agreements 
     for an award under section 2785 include the following:
       ``(A) The applicant involved will ensure that, for each 
     community health advisor program operated with the award, a 
     program is carried out to train community health advisors to 
     provide the authorized program services, including practical 
     experiences in providing services for health promotion and 
     disease prevention.
       ``(B) The program of training will provide for the 
     continuing education of the community health advisors.
       ``(C) Not more than 15 percent of the award will be 
     expended for the program of training.
       ``(2) Compensation.--With respect to compliance with the 
     agreements made under this subtitle, the purposes for which 
     an award under section 2785 may be expended include providing 
     compensation for the services of community health advisors.
       ``(h) Reports to Secretary; Assessment of Effectiveness.--
     Funding agreements for an award under section 2785 for an 
     applicant include the following:
       ``(1) The applicant will ensure that, for each fiscal year 
     for which a community health advisor program receives amounts 
     from the award, the program will prepare a report describing 
     the activities of the program for such year, including--
       ``(A) a specification of the number of individuals served 
     by the program;
       ``(B) a specification of the entities with which the 
     program has collaborated in carrying out the purpose 
     described in section 2786(a)(1); and
       ``(C) an assessment of the extent of the effectiveness of 
     the program in carrying out such purpose.
       ``(2) Such reports will include such additional information 
     regarding the applicant and the programs as the Secretary may 
     require.
       ``(3) The applicant will prepare the reports as a single 
     document and will submit the document to the Secretary not 
     later than February 1 of the fiscal year following the fiscal 
     year for which the reports were prepared.

     ``SEC. 2788. APPLICATION FOR ASSISTANCE; STATE PLAN.

       ``For purposes of section 2785, an application is in 
     accordance with this section if--
       ``(1) the application is submitted not later than the date 
     specified by the Secretary;
       ``(2) the application contains each funding agreement 
     described in this subtitle;
       ``(3) the application contains a State plan describing the 
     purposes for which the award is to be expended in the State, 
     including a description of the manner in which the applicant 
     will comply with each such funding agreement; and
       ``(4) the application is in such form, is made in such 
     manner, and contains such agreements, assurances, and 
     information as the Secretary determines to be necessary to 
     carry out this subtitle.

     ``SEC. 2789. DETERMINATION OF AMOUNT OF ALLOTMENT.

       ``(a) In General.--For purposes of section 2785, the 
     allotment under this section with respect to a State for a 
     fiscal year is the sum of the respective amounts determined 
     for the State under subsection (b) and subsection (c).
       ``(b) Amount Relating to Population.--For purposes of 
     subsection (a), the amount determined under this subsection 
     is the product of--
       ``(1) an amount equal to 50 percent of the amount 
     appropriated under section 2784 for the fiscal year and 
     available for awards under section 2785; and
       ``(2) the percentage constituted by the ratio of--
       ``(A) the number of individuals residing in the State 
     involved; to
       ``(B) the sum of the respective amounts determined for each 
     State under subparagraph (A).
       ``(c) Amount Relating to Poverty Level.--For purposes of 
     subsection (a), the amount determined under this subsection 
     is the product of--
       ``(1) the amount determined under subsection (b)(1); and
       ``(2) the percentage constituted by the ratio of--
       ``(A) the number of individuals residing in the State whose 
     income is at or below an amount equal to 200 percent of the 
     official poverty line; to
       ``(B) the sum of the respective amounts determined for each 
     State under subparagraph (A).

     ``SEC. 2790. QUALITY ASSURANCE; COST-EFFECTIVENESS.

       ``The Secretary shall establish guidelines for assuring the 
     quality of community health advisor programs (including 
     quality in the training of community health advisors) and for 
     assuring the cost-effectiveness of the programs. A funding 
     agreement for an award under section 2785 is that the 
     applicant involved will carry out such programs in accordance 
     with the guidelines.

     ``SEC. 2791. EVALUATIONS; TECHNICAL ASSISTANCE.

       ``(a) Evaluations.--The Secretary shall conduct evaluations 
     of community health advisor programs and disseminate 
     information developed as result of the evaluations to the 
     States. In conducting such evaluations, the Secretary shall 
     determine whether the programs are in compliance with the 
     guidelines established under section 2790.
       ``(b) Technical Assistance.--The Secretary may provide 
     technical assistance to recipients of awards under section 
     2785 with respect to the planning, development, and operation 
     of community health advisor programs.
       ``(c) Grants and Contracts.--The Secretary may carry out 
     this section directly or through grants, cooperative 
     agreements, or contracts.
       ``(d) Limitation on Expenditures.--Of the amounts 
     appropriated under section 2784 for a fiscal year, the 
     Secretary may reserve not more than 10 percent for carrying 
     out this section.

     ``SEC. 2792. RULE OF CONSTRUCTION REGARDING PROGRAMS OF 
                   INDIAN HEALTH SERVICE.

       ``This subtitle may not be construed as requiring the 
     Secretary to modify or terminate the program carried out by 
     the Director of the Indian Health Service and designated by 
     such Director as the Community Health Representative Program. 
     The Secretary shall ensure that support for such Program is 
     not supplanted by awards under section 2785. In communities 
     in which both such Program and a community health advisor 
     program are being carried out, the Secretary shall ensure 
     that the community health advisor program works in 
     cooperation with, and as a complement to, the Community 
     Health Representative Program.

     ``SEC. 2793. DEFINITIONS.

       ``For purposes of this subtitle:
       ``(1) The term `authorized program services', with respect 
     to a community health advisor program, means the services 
     specified in section 2786(b)(2).
       ``(2) The term `community health advisor' has the meaning 
     given such term in section 2786(d).
       ``(3) The term `community health advisor program' means a 
     program carried out under section 2786(b).
       ``(4) The term `financial assistance', with respect to an 
     award under section 2785, means a grant, cooperative 
     agreement, or a contract.
       ``(5) The term `funding agreement' means an agreement 
     required as a condition of receiving an award under section 
     2785.
       ``(6) The term `official poverty line' means the official 
     poverty line established by the Director of the Office of 
     Management and Budget and revised by the Secretary in 
     accordance with section 673(2) of the Omnibus Budget 
     Reconciliation Act of 1981, which poverty line is applicable 
     the size of the family involved.
       ``(7) The term `State involved', with respect to an 
     applicant for an award under section 2785, means the State in 
     which the applicant is to carry out a community health 
     advisor program.

     ``SEC. 2794. EFFECT OF INSUFFICIENT APPROPRIATIONS FOR 
                   MINIMUM ALLOTMENTS.

       ``(a) In General.--If the amounts made available under 
     section 2784 for a fiscal year are insufficient for providing 
     each State (or entity designated by the State pursuant to 
     section 2785, as the case may be) with an award under section 
     2785 in an amount equal to or greater than the amount 
     specified in section 2789(a)(2), the Secretary shall, from 
     such amounts as are made available under subsection (a), make 
     such awards on a discretionary basis.
       ``(b) Rule of Construction.--For purposes of subsection 
     (a), awards under section 2785 are made on a discretionary 
     basis if the Secretary determines which States (or entities 
     designated by States pursuant to such section, as the case 
     may be) are to receive such awards, subject to meeting the 
     requirements of this subtitle for such an award, and the 
     Secretary determines the amount of such awards.
                    ``Subtitle F--General Provisions

     ``SEC. 2798. REQUIREMENT REGARDING ACCREDITATION OF SCHOOLS, 
                   DEPARTMENTS, AND PROGRAMS.

       ``Except as indicated otherwise in this title:
       ``(1) A reference in this title to a school of public 
     health, a school of nursing, or any other entity providing 
     education or training in a health profession (whether a 
     school, department, program, or other entity) is a reference 
     to the entity as defined under section 799 or 853.
       ``(2) If an entity is not defined in either of such 
     sections, the reference in this title to the entity has the 
     meaning provided by the Secretary, except that the Secretary 
     shall require for purposes of this title that the entity be 
     accredited for the provision of the education or training 
     involved.
     [[Page S1937]] ``SEC. 2799. RELATION TO OTHER FUNDS.

       ``Notwithstanding any other provision of law, the 
     authorizations of appropriations established in this title 
     are in addition to any other authorizations of appropriations 
     that are available for the purposes described with respect to 
     such appropriations in this title.

     ``SEC. 2799A. DEFINITIONS.

       ``(a) In General.--For purposes of this title:
       ``(1) The term `Healthy People 2000 Objectives' means the 
     objectives established by the Secretary toward the goals of 
     increasing the span of healthy life, reducing health 
     disparities among various populations, and providing access 
     to preventive services, which objectives apply to the health 
     status of the population of the United States for the year 
     2000.
       ``(2) The term `medically underserved community' means--
       ``(A) a community that has a substantial number of 
     individuals who are members of a medically underserved 
     population, as defined in section 330; or
       ``(B) a community a significant portion of which is a 
     health professional shortage area designated under section 
     332.''.
                 TITLE IV--MEDICAL AND HEALTH RESEARCH

     SEC. 4001. SHORT TITLE.

       This title may be cited as the ``Medical and Health 
     Research Act of 1995''.

     SEC. 4002. FINDINGS.

       The Congress finds the following:
       (1) Nearly 4 of 5 peer reviewed research projects deemed 
     worthy of funding by the National Institutes of Health are 
     not funded.
       (2) Less than 2 percent of the nearly one trillion dollars 
     our Nation spends on health care is devoted to health 
     research, while the defense industry spends 15 percent of its 
     budget on research.
       (3) Public opinion surveys have shown that Americans want 
     more Federal resources put into health research and support 
     by having a portion of their health insurance premiums set 
     aside for this purpose.
       (4) Ample evidence exists to demonstrate that health 
     research has improved the quality of health care in the 
     United States. Advances such as the development of vaccines, 
     the cure of many childhood cancers, drugs that effectively 
     treat a host of diseases and disorders, a process to protect 
     our Nation's blood supply from the HIV virus, progress 
     against cardiovasculor disease including heart attack and 
     stroke, and new strategies for the early detection and 
     treatment of diseases such as colon, breast, and prostate 
     cancer clearly demonstrates the benefits of health research.
       (5) Among the most effective methods to control health care 
     costs are prevention and cure of disease and disability, 
     thus, health research which holds the promise of cure and 
     prevention of disease and disability is a critical component 
     of any comprehensive health care reform plan.
       (6) The state of our Nation's research facilities at the 
     National Institutes of Health and at universities is 
     deteriorating significantly. Renovation and repair of these 
     facilities are badly needed to maintain and improve the 
     quality of research.
       (7) Because the Omnibus Budget Reconciliation Act of 1993 
     freezes discretionary spending for the next 5 years, the 
     Nation's investment in health research through the National 
     Institutes of Health is likely to decline in real terms 
     unless corrective legislative action is taken.
       (8) A health research fund is needed to maintain our 
     Nation's commitment to health research and to increase the 
     percentage of approved projects which receive funding at the 
     National Institutes of Health to at least 33 percent.

     SEC. 4003. NATIONAL FUND FOR HEALTH RESEARCH.

       (a) Establishment.--There is established in the Treasury of 
     the United States an account, to be known as the ``National 
     Fund for Health Research'' (hereafter referred to in this 
     section as the ``Fund''), consisting of such amounts as are 
     transferred to the Fund under subsection (b) and any interest 
     earned on investment of amounts in the Fund.
       (b) Transfers to Fund.--
       (1) In general.--With respect to each of the 5 full 
     calendar years beginning after the date of enactment of this 
     Act, the Secretary of the Treasury shall transfer to the Fund 
     an amount equal to the applicable amount under paragraph (2).
       (2) Applicable amount.--The applicable amount under this 
     paragraph is--
       (A) with respect to amounts in the Health Care Reform Trust 
     Fund established under section 9551(a)(2)(A) of the Internal 
     Revenue Code of 1986, $1,200,000,000 for each calendar year 
     described in paragraph (1); and
       (B) with respect to amounts received in the Treasury under 
     section 6097 of the Internal Revenue Code of 1986, 100 
     percent of the amounts received under such section in each 
     calendar year described in paragraph (1).
       (3) Designation of overpayments and contributions.--
       (A)  In general.--Subchapter A of chapter 61 of the 
     Internal Revenue Code of 1986 (relating to returns and 
     records) is amended by adding at the end the following new 
     part:

   ``PART IX--DESIGNATION OF OVERPAYMENTS AND CONTRIBUTIONS FOR THE 
                   NATIONAL FUND FOR HEALTH RESEARCH
``Sec. 6097. Amounts for the National Fund for Health Research.
     ``SEC. 6097. AMOUNTS FOR THE NATIONAL FUND FOR HEALTH 
                   RESEARCH.

       ``(a) In General.--Every individual (other than a 
     nonresident alien) may designate that--
       ``(1) a portion (not less than $1) of any overpayment of 
     the tax imposed by chapter 1 for the taxable year, and
       ``(2) a cash contribution (not less than $1),

     be paid over to the National Fund for Health Research 
     established under section 4003 of the Health Partnership Act 
     of 1995. In the case of a joint return of a husband and wife, 
     each spouse may designate one-half of any such overpayment of 
     tax (not less than $2).
       ``(b) Manner and Time of Designation.--Any designation 
     under subsection (a) may be made with respect to any taxable 
     year only at the time of filing the original return of the 
     tax imposed by chapter 1 for such taxable year. Such 
     designation shall be made either on the 1st page of the 
     return or on the page bearing the taxpayer's signature.
       ``(c) Overpayments Treated as Refunded.--For purposes of 
     this section, any overpayment of tax designated under 
     subsection (a) shall be treated as being refunded to the 
     taxpayer as of the last day prescribed for filing the return 
     of tax imposed by chapter 1 (determined with regard to 
     extensions) or, if later, the date the return is filed.
       ``(d) Designated Amounts Not Deductible.--No amount 
     designated pursuant to subsection (a) shall be allowed as a 
     deduction under section 170 or any other section for any 
     taxable year.
       ``(e) Termination.--This section shall not apply to taxable 
     years beginning in a calendar year after a determination by 
     the Secretary that the sum of all designations under 
     subsection (a) for taxable years beginning in the second and 
     third calendar years preceding the calendar year is less than 
     $5,000,000.''.
       (B) Clerical amendment.--The table of parts for subchapter 
     A of chapter 61 of such Code is amended by adding at the end 
     the following new item:

``Part IX. Designation of overpayments and contributions for the 
              National Fund for Health Research.''.
       (C) Effective date.--The amendments made by this paragraph 
     shall apply to taxable years beginning after December 31, 
     1995.
       (c) Expenditures From Fund.--
       (1) In general.--The Secretary of the Treasury shall pay 
     annually, within 30 days after the President signs an 
     appropriations Act for the Departments of Labor, Health and 
     Human Services, and Education and related agencies, or by the 
     end of the first quarter of the fiscal year, to the Secretary 
     of Health and Human Services on behalf of the National 
     Institutes of Health, an amount equal to the amount in the 
     National Fund for Health Research at the time of such 
     payment, to enable the Secretary to carry out the purpose of 
     section 404F of the Public Health Service Act, less any 
     administrative expenses which may be paid under paragraph 
     (3).
       (2) Purposes for expenditures from fund.--Part A of title 
     IV of the Public Health Service Act (42 U.S.C. 281 et seq.) 
     is amended by adding at the end the following new section:

     ``SEC. 404F. EXPENDITURES FROM THE NATIONAL FUND FOR HEALTH 
                   RESEARCH.

       ``(a) In General.--From amounts received for any fiscal 
     year from the National Fund for Health Research, the 
     Secretary of Health and Human Services shall distribute--
       ``(1) 2 percent of such amounts during any fiscal year to 
     the Office of the Director of the National Institutes of 
     Health to be allocated at the Director's discretion for the 
     following activities:
       ``(A) for carrying out the responsibilities of the Office 
     of the Director, National Institutes of Health, including the 
     Office of Research on Women's Health and the Office of 
     Research on Minority Health, the Office of the Alternative 
     Medicine and the Office of Rare Diseases Research; and
       ``(B) for construction and acquisition of equipment for or 
     facilities of or used by the National Institutes of Health;
       ``(2) 2 percent of such amounts for transfer to the 
     National Center for Research Resources to carry out section 
     1502 of the National Institutes of Health Revitalization Act 
     of 1993 concerning Biomedical and Behavioral Research 
     Facilities;
       ``(3) 1 percent of such amounts during any fiscal year for 
     carrying out section 301 and part D of title IV with respect 
     to health information communications; and
       ``(4) the remainder of such amounts during any fiscal year 
     to member institutes of the National Institutes of Health and 
     centers in the same proportion to the total amount received 
     under this section, as the amount of annual appropriations 
     under appropriations Acts for each member institute and 
     center for the fiscal year bears to the total amount of 
     appropriations under appropriations Acts for all member 
     institutes and centers of the National Institutes of Health 
     for the fiscal year.
       ``(b) Plans of Allocation.--The amounts transferred under 
     subsection (a) shall be allocated by the Director of NIH or 
     the various directors of the institutes and centers, as the 
     case may be, pursuant to allocation plans developed by the 
     various advisory councils to such directors, after 
     consultation with such directors.''.
       (3) Administrative expenses.--Amounts in the National Fund 
     for Health Research shall 
     [[Page S1938]] be available to pay the administrative 
     expenses of the Department of the Treasury directly allocable 
     to--
       (A) modifying the individual income tax return forms to 
     carry out section 6097 of the Internal Revenue Code of 1986;
       (B) carrying out this section with respect to such Fund; 
     and
       (C) processing amounts received under this section and 
     transferring such amounts to such Fund.
       (4) Trigger and release of fund monies.--No expenditures 
     shall be made pursuant to section 4003(c) during any fiscal 
     year in which the annual amount appropriated for the National 
     Institutes of Health is less than the amount so appropriated 
     for the prior fiscal year.
       (d) Budget Enforcement.--Amounts contained in the National 
     Fund for Health Research shall be excluded from, and shall 
     not be taken into account for purposes of, any budget 
     enforcement procedures under the Congressional Budget Act of 
     1974 or the Balanced Budget Emergency Deficit Control Act of 
     1985.
                        TITLE V--FRAUD AND ABUSE

     SEC. 5001. SHORT TITLE.

       This Act may be cited as the ``Health Fraud and Abuse 
     Reduction Act of 1995''.
         Subtitle A--All-Payer Fraud and Abuse Control Program

     SEC. 5101. ALL-PAYER FRAUD AND ABUSE CONTROL PROGRAM.

       (a) Establishment of Program.--
       (1) In general.--Not later than January 1, 1996, the 
     Secretary of Health and Human Services (in this subtitle 
     referred to as the ``Secretary''), acting through the Office 
     of the Inspector General of the Department of Health and 
     Human Services, and the Attorney General shall establish a 
     program--
       (A) to coordinate Federal, State, and local law enforcement 
     programs to control fraud and abuse with respect to the 
     delivery of and payment for health care in the United States,
       (B) to conduct investigations, audits, evaluations, and 
     inspections relating to the delivery of and payment for 
     health care in the United States, and
       (C) to facilitate the enforcement of the provisions of 
     sections 1128, 1128A, and 1128B of the Social Security Act 
     and other statutes applicable to health care fraud and abuse.
       (2) Coordination with health plans.--In carrying out the 
     program established under paragraph (1), the Secretary and 
     the Attorney General shall consult with, and arrange for the 
     sharing of data with representatives of health plans.
       (3) Regulations.--
       (A) In general.--The Secretary and the Attorney General 
     shall by regulation establish standards to carry out the 
     program under paragraph (1).
       (B) Information standards.--
       (i) In general.--Such standards shall include standards 
     relating to the furnishing of information by health plans, 
     providers, and others to enable the Secretary and the 
     Attorney General to carry out the program (including 
     coordination with health plans under paragraph (2)).
       (ii) Confidentiality.--Such standards shall include 
     procedures to assure that such information is provided and 
     utilized in a manner that appropriately protects the 
     confidentiality of the information and the privacy of 
     individuals receiving health care services and items.
       (iii) Qualified immunity for providing information.--The 
     provisions of section 1157(a) of the Social Security Act 
     (relating to limitation on liability) shall apply to a person 
     providing information to the Secretary or the Attorney 
     General in conjunction with their performance of duties under 
     this section.
       (C) Disclosure of ownership information.--
       (i) In general.--Such standards shall include standards 
     relating to the disclosure of ownership information described 
     in clause (ii) by any entity providing health care services 
     and items.
       (ii) Ownership information described.--The ownership 
     information described in this clause includes--

       (I) a description of such items and services provided by 
     such entity;
       (II) the names and unique physician identification numbers 
     of all physicians with a financial relationship (as defined 
     in section 1877(a)(2) of the Social Security Act) with such 
     entity;
       (III) the names of all other individuals with such an 
     ownership or investment interest in such entity; and
       (IV) any other ownership and related information required 
     to be disclosed by such entity under section 1124 or section 
     1124A of the Social Security Act, except that the Secretary 
     shall establish procedures under which the information 
     required to be submitted under this subclause will be reduced 
     with respect to health care provider entities that the 
     Secretary determines will be unduly burdened if such entities 
     are required to comply fully with this subclause.

       (4) Authorization of appropriations for investigators and 
     other personnel.--In addition to any other amounts authorized 
     to be appropriated to the Secretary, the Attorney General, 
     the Director of the Federal Bureau of Investigation, and the 
     Inspectors General of the Departments of Defense, Labor, and 
     Veterans Affairs and of the Office of Personnel Management, 
     for health care anti-fraud and abuse activities for a fiscal 
     year, there are authorized to be appropriated additional 
     amounts, from the Health Care Fraud and Abuse Account 
     described in subsection (b) of this section, as may be 
     necessary to enable the Secretary, the Attorney General, and 
     such Inspectors General to conduct investigations and audits 
     of allegations of health care fraud and abuse and otherwise 
     carry out the program established under paragraph (1) in a 
     fiscal year.
       (5) Ensuring access to documentation.--The Inspector 
     General of the Department of Health and Human Services is 
     authorized to exercise the authority described in paragraphs 
     (4) and (5) of section 6 of the Inspector General Act of 1978 
     (relating to subpoenas and administration of oaths) with 
     respect to the activities under the all-payer fraud and abuse 
     control program established under this subsection to the same 
     extent as such Inspector General may exercise such 
     authorities to perform the functions assigned by such Act.
       (6) Authority of inspector general.--Nothing in this title 
     shall be construed to diminish the authority of any Inspector 
     General, including such authority as provided in the 
     Inspector General Act of 1978.
       (7) health plan defined.--For the purposes of this 
     subsection, the term ``health plan'' shall have the meaning 
     given such term in section 1128(i) of the Social Security 
     Act.
       (b) Health Care Fraud and Abuse Control Account.--
       (1) Establishment.--
       (A) In general.--There is hereby established an account to 
     be known as the ``Health Care Fraud and Abuse Control 
     Account'' (in this section referred to as the ``Anti-Fraud 
     Account''). The Anti-Fraud Account shall consist of--
       (i) such gifts and bequests as may be made as provided in 
     subparagraph (B);
       (ii) such amounts as may be deposited in the Anti-Fraud 
     Account as provided in subsection (a)(4), sections 5441(b) 
     and 5442(b), and title XI of the Social Security Act; and
       (iii) such amounts as are transferred to the Anti-Fraud 
     Account under subparagraph (C).
       (B) Authorization to accept gifts.--The Anti-Fraud Account 
     is authorized to accept on behalf of the United States money 
     gifts and bequests made unconditionally to the Anti-Fraud 
     Account, for the benefit of the Anti-Fraud Account or any 
     activity financed through the Anti-Fraud Account.
       (C) Transfer of amounts.--
       (i) In general.--The Secretary of the Treasury shall 
     transfer to the Anti-Fraud Account an amount equal to the sum 
     of the following:

       (I) Criminal fines imposed in cases involving a Federal 
     health care offense (as defined in section 982(a)(6)(B) of 
     title 18, United States Code).

       (ii) Administrative penalties and assessments imposed under 
     titles XI, XVIII, and XIX of the Social Security Act (except 
     as otherwise provided by law).
       (iii) Amounts resulting from the forfeiture of property by 
     reason of a Federal health care offense.
       (iv) Penalties and damages imposed under the False Claims 
     Act (31 U.S.C. 3729 et seq.), in cases involving claims 
     related to the provision of health care items and services 
     (other than funds awarded to a relator or for restitution).
       (2) Use of funds.--
       (A) In general.--Amounts in the Anti-Fraud Account shall be 
     available to carry out the health care fraud and abuse 
     control program established under subsection (a) (including 
     the administration of the program), and may be used to cover 
     costs incurred in operating the program, including costs 
     (including equipment, salaries and benefits, and travel and 
     training) of--
       (i) prosecuting health care matters (through criminal, 
     civil, and administrative proceedings);
       (ii) investigations;
       (iii) financial and performance audits of health care 
     programs and operations;
       (iv) inspections and other evaluations; and
       (v) provider and consumer education regarding compliance 
     with the provisions of this subtitle.
       (B) Funds used to supplement agency appropriations.--It is 
     intended that disbursements made from the Anti-Fraud Account 
     to any Federal agency be used to increase and not supplant 
     the recipient agency's appropriated operating budget.
       (3) Annual report.--The Secretary and the Attorney General 
     shall submit jointly an annual report to Congress on the 
     amount of revenue which is generated and disbursed by the 
     Anti-Fraud Account in each fiscal year.
       (4) Use of funds by inspector general.--
       (A) Reimbursements for investigations.--The Inspector 
     General is authorized to receive and retain for current use 
     reimbursement for the costs of conducting investigations, 
     when such restitution is ordered by a court, voluntarily 
     agreed to by the payer, or otherwise.
       (B) Crediting.--Funds received by the Inspector General or 
     the Inspectors General of the Departments of Defense, Labor, 
     and Veterans Affairs and of the Office of Personnel 
     Management, as reimbursement for costs of conducting 
     investigations shall be deposited to the credit of the 
     appropriation from which initially paid, or to appropriations 
     for similar purposes currently available at the time of 
     deposit, and shall remain available for obligation for 1 year 
     from the date of their deposit.
     [[Page S1939]] SEC. 5102. APPLICATION OF CERTAIN FEDERAL 
                   HEALTH ANTI-FRAUD AND ABUSE SANCTIONS TO FRAUD 
                   AND ABUSE AGAINST ANY HEALTH PLAN.

       (a) Crimes.--
       (1) Social security act.--Section 1128B of the Social 
     Security Act (42 U.S.C. 1320a-7b) is amended as follows:
       (A) In the heading, by adding at the end the following: 
     ``or health plans''.
       (B) In subsection (a)(1)--
       (i) by striking ``title XVIII or'' and inserting ``title 
     XVIII,'', and
       (ii) by adding at the end the following: ``or a health plan 
     (as defined in section 1128(i)),''.
       (C) In subsection (a)(5), by striking ``title XVIII or a 
     State health care program'' and inserting ``title XVIII, a 
     State health care program, or a health plan''.
       (D) In the second sentence of subsection (a)--
       (i) by inserting after ``title XIX'' the following: ``or a 
     health plan'', and
       (ii) by inserting after ``the State'' the following: ``or 
     the plan''.
       (2) Identification of community service opportunities.--
     Section 1128B of such Act (42 U.S.C. 1320a-7b) is further 
     amended by adding at the end the following new subsection:
       ``(f) The Secretary may--
       ``(1) in consultation with State and local health care 
     officials, identify opportunities for the satisfaction of 
     community service obligations that a court may impose upon 
     the conviction of an offense under this section, and
       ``(2) make information concerning such opportunities 
     available to Federal and State law enforcement officers and 
     State and local health care officials.''.
       (b) Health Plan Defined.--Section 1128 of the Social 
     Security Act (42 U.S.C. 1320a-7) is amended by redesignating 
     subsection (i) as subsection (j) and by inserting after 
     subsection (h) the following new subsection:
       ``(i) Health Plan Defined.--For purposes of sections 1128A 
     and 1128B, the term `health plan' means a plan that provides 
     health benefits, whether through directly, through insurance, 
     or otherwise, and includes a policy of health insurance, a 
     contract of a service benefit organization, or a membership 
     agreement with a health maintenance organization or other 
     prepaid health plan, and also includes an employee welfare 
     benefit plan or a multiple employer welfare plan (as such 
     terms are defined in section 3 of the Employee Retirement 
     Income Security Act of 1974).''.
       (c) Effective Date.--The amendments made by this section 
     shall take effect on January 1, 1996.
     Subtitle B--Revisions to Current Sanctions for Fraud and Abuse

     SEC. 5201. MANDATORY EXCLUSION FROM PARTICIPATION IN MEDICARE 
                   AND STATE HEALTH CARE PROGRAMS.

       (a) Individual Convicted of Felony Relating to Fraud.--
       (1) In general.--Section 1128(a) of the Social Security Act 
     (42 U.S.C. 1320a-7(a)) is amended by adding at the end the 
     following new paragraph:
       ``(3) Felony conviction relating to fraud.--Any individual 
     or entity that has been convicted after the date of the 
     enactment of the Health Care Fraud Prevention Act of 1995, 
     under Federal or State law, in connection with the delivery 
     of a health care item or service or with respect to any act 
     or omission in a program (other than those specifically 
     described in paragraph (1)) operated by or financed in whole 
     or in part by any Federal, State, or local government agency, 
     of a criminal offense consisting of a felony relating to 
     fraud, theft, embezzlement, breach of fiduciary 
     responsibility, or other financial misconduct.''.
       (2) Conforming amendment.--Section 1128(b)(1) of such Act 
     (42 U.S.C. 1320a-7(b)(1)) is amended--
       (A) in the heading, by striking ``Conviction'' and 
     inserting ``Misdemeanor conviction''; and
       (B) by striking ``criminal offense'' and inserting 
     ``criminal offense consisting of a misdemeanor''.
       (b) Individual Convicted of Felony Relating to Controlled 
     Substance.--
       (1) In general.--Section 1128(a) of the Social Security Act 
     (42 U.S.C. 1320a-7(a)), as amended by subsection (a), is 
     amended by adding at the end the following new paragraph:
       ``(4) Felony conviction relating to controlled substance.--
     Any individual or entity that has been convicted after the 
     date of the enactment of the Health Care Fraud Prevention Act 
     of 1995, under Federal or State law, of a criminal offense 
     consisting of a felony relating to the unlawful manufacture, 
     distribution, prescription, or dispensing of a controlled 
     substance.''.
       (2) Conforming amendment.--Section 1128(b)(3) of such Act 
     (42 U.S.C. 1320a-7(b)(3)) is amended--
       (A) in the heading, by striking ``Conviction'' and 
     inserting ``Misdemeanor conviction''; and
       (B) by striking ``criminal offense'' and inserting 
     ``criminal offense consisting of a misdemeanor''.

     SEC. 5202. ESTABLISHMENT OF MINIMUM PERIOD OF EXCLUSION FOR 
                   CERTAIN INDIVIDUALS AND ENTITIES SUBJECT TO 
                   PERMISSIVE EXCLUSION FROM MEDICARE AND STATE 
                   HEALTH CARE PROGRAMS.

       Section 1128(c)(3) of the Social Security Act (42 U.S.C. 
     1320a-7(c)(3)) is amended by adding at the end the following 
     new subparagraphs:
       ``(D) In the case of an exclusion of an individual or 
     entity under paragraph (1), (2), or (3) of subsection (b), 
     the period of the exclusion shall be 3 years, unless the 
     Secretary determines in accordance with published regulations 
     that a shorter period is appropriate because of mitigating 
     circumstances or that a longer period is appropriate because 
     of aggravating circumstances.
       ``(E) In the case of an exclusion of an individual or 
     entity under subsection (b)(4) or (b)(5), the period of the 
     exclusion shall not be less than the period during which the 
     individual's or entity's license to provide health care is 
     revoked, suspended, or surrendered, or the individual or the 
     entity is excluded or suspended from a Federal or State 
     health care program.
       ``(F) In the case of an exclusion of an individual or 
     entity under subsection (b)(6)(B), the period of the 
     exclusion shall be not less than 1 year.''.

     SEC. 5203. PERMISSIVE EXCLUSION OF INDIVIDUALS WITH OWNERSHIP 
                   OR CONTROL INTEREST IN SANCTIONED ENTITIES.

       Section 1128(b) of the Social Security Act (42 U.S.C. 
     1320a-7(b)) is amended by adding at the end the following new 
     paragraph:
       ``(15) Individuals controlling a sanctioned entity.--Any 
     individual who has a direct or indirect ownership or control 
     interest of 5 percent or more, or an ownership or control 
     interest (as defined in section 1124(a)(3)) in, or who is an 
     officer, director, agent, or managing employee (as defined in 
     section 1126(b)) of, an entity--
       ``(A) that has been convicted of any offense described in 
     subsection (a) or in paragraph (1), (2), or (3) of this 
     subsection;
       ``(B) against which a civil monetary penalty has been 
     assessed under section 1128A; or
       ``(C) that has been excluded from participation under a 
     program under title XVIII or under a State health care 
     program.''.

     SEC. 5204. SANCTIONS AGAINST PRACTITIONERS AND PERSONS FOR 
                   FAILURE TO COMPLY WITH STATUTORY OBLIGATIONS.

       (a) Minimum Period of Exclusion for Practitioners and 
     Persons Failing To Meet Statutory Obligations.--
       (1) In general.--The second sentence of section 1156(b)(1) 
     of the Social Security Act (42 U.S.C. 1320c-5(b)(1)) is 
     amended by striking ``may prescribe)'' and inserting ``may 
     prescribe, except that such period may not be less than 1 
     year)''.
       (2) Conforming amendment.--Section 1156(b)(2) of such Act 
     (42 U.S.C. 1320c-5(b)(2)) is amended by striking ``shall 
     remain'' and inserting ``shall (subject to the minimum period 
     specified in the second sentence of paragraph (1)) remain''.
       (b) Repeal of ``Unwilling or Unable'' Condition for 
     Imposition of Sanction.--Section 1156(b)(1) of the Social 
     Security Act (42 U.S.C. 1320c-5(b)(1)) is amended--
       (1) in the second sentence, by striking ``and determines'' 
     and all that follows through ``such obligations,''; and
       (2) by striking the third sentence.
     SEC. 5205. INTERMEDIATE SANCTIONS FOR MEDICARE HEALTH 
                   MAINTENANCE ORGANIZATIONS.

       (a) Application of Intermediate Sanctions for Any Program 
     Violations.--
       (1) In general.--Section 1876(i)(1) of the Social Security 
     Act (42 U.S.C. 1395mm(i)(1)) is amended by striking ``the 
     Secretary may terminate'' and all that follows and inserting 
     the following: ``in accordance with procedures established 
     under paragraph (9), the Secretary may at any time terminate 
     any such contract or may impose the intermediate sanctions 
     described in paragraph (6)(B) or (6)(C) (whichever is 
     applicable) on the eligible organization if the Secretary 
     determines that the organization--
       ``(A) has failed substantially to carry out the contract;
       ``(B) is carrying out the contract in a manner inconsistent 
     with the efficient and effective administration of this 
     section; or
       ``(C) no longer substantially meets the applicable 
     conditions of subsections (b), (c), (e), and (f).''.
       (2) Other intermediate sanctions for miscellaneous program 
     violations.--Section 1876(i)(6) of such Act (42 U.S.C. 
     1395mm(i)(6)) is amended by adding at the end the following 
     new subparagraph:
       ``(C) In the case of an eligible organization for which the 
     Secretary makes a determination under paragraph (1) the basis 
     of which is not described in subparagraph (A), the Secretary 
     may apply the following intermediate sanctions:
       ``(i) Civil money penalties of not more than $25,000 for 
     each determination under paragraph (1) if the deficiency that 
     is the basis of the determination has directly adversely 
     affected (or has the substantial likelihood of adversely 
     affecting) an individual covered under the organization's 
     contract.
       ``(ii) Civil money penalties of not more than $10,000 for 
     each week beginning after the initiation of procedures by the 
     Secretary under paragraph (9) during which the deficiency 
     that is the basis of a determination under paragraph (1) 
     exists.
       ``(iii) Suspension of enrollment of individuals under this 
     section after the date the Secretary notifies the 
     organization of a determination under paragraph (1) and until 
     the Secretary is satisfied that the deficiency that is the 
     basis for the determination has been corrected and is not 
     likely to recur.''.
       (3) Procedures for imposing sanctions.--Section 1876(i) of 
     such Act (42 U.S.C. 
     [[Page S1940]] 1395mm(i)) is amended by adding at the end the 
     following new paragraph:
       ``(9) The Secretary may terminate a contract with an 
     eligible organization under this section or may impose the 
     intermediate sanctions described in paragraph (6) on the 
     organization in accordance with formal investigation and 
     compliance procedures established by the Secretary under 
     which--
       ``(A) the Secretary provides the organization with the 
     opportunity to develop and implement a corrective action plan 
     to correct the deficiencies that were the basis of the 
     Secretary's determination under paragraph (1);
       ``(B) in deciding whether to impose sanctions, the 
     Secretary considers aggravating factors such as whether an 
     entity has a history of deficiencies or has not taken action 
     to correct deficiencies the Secretary has brought to their 
     attention;
       ``(C) there are no unreasonable or unnecessary delays 
     between the finding of a deficiency and the imposition of 
     sanctions; and
       ``(D) the Secretary provides the organization with 
     reasonable notice and opportunity for hearing (including the 
     right to appeal an initial decision) before imposing any 
     sanction or terminating the contract.''.
       (4) Conforming amendments.--Section 1876(i)(6)(B) of such 
     Act (42 U.S.C. 1395mm(i)(6)(B)) is amended by striking the 
     second sentence.
       (b) Agreements With Peer Review Organizations.--
       (1) Requirement for written agreement.--Section 
     1876(i)(7)(A) of the Social Security Act (42 U.S.C. 
     1395mm(i)(7)(A)) is amended by striking ``an agreement'' and 
     inserting ``a written agreement''.
       (2) Development of model agreement.--Not later than July 1, 
     1996, the Secretary shall develop a model of the agreement 
     that an eligible organization with a risk-sharing contract 
     under section 1876 of the Social Security Act must enter into 
     with an entity providing peer review services with respect to 
     services provided by the organization under section 
     1876(i)(7)(A) of such Act.
       (3) Report by gao.--
       (A) Study.--The Comptroller General of the United States 
     shall conduct a study of the costs incurred by eligible 
     organizations with risk-sharing contracts under section 
     1876(b) of such Act of complying with the requirement of 
     entering into a written agreement with an entity providing 
     peer review services with respect to services provided by the 
     organization, together with an analysis of how information 
     generated by such entities is used by the Secretary to assess 
     the quality of services provided by such eligible 
     organizations.
       (B) Report to congress.--Not later than July 1, 1998, the 
     Comptroller General shall submit a report to the Committee on 
     Ways and Means and the Committee on Energy and Commerce of 
     the House of Representatives and the Committee on Finance and 
     the Special Committee on Aging of the Senate on the study 
     conducted under subparagraph (A).
       (c) Effective Date.--The amendments made by this section 
     shall apply with respect to contract years beginning on or 
     after January 1, 1996.

     SEC. 5206. EFFECTIVE DATE.

       The amendments made by this subtitle shall take effect 
     January 1, 1996.
                  Subtitle C--Civil Monetary Penalties

     SEC. 5301. CIVIL MONETARY PENALTIES.

       (a) General Civil Monetary Penalties.--Section 1128A of the 
     Social Security Act (42 U.S.C. 1320a-7a) is amended as 
     follows:
       (1) In subsection (a)(1), by inserting ``or of any health 
     plan (as defined in section 1128(i)),'' after ``subsection 
     (i)(1)),''.
       (2) In subsection (f)--
       (A) by redesignating paragraph (3) as paragraph (4); and
       (B) by inserting after paragraph (2) the following new 
     paragraphs:
       ``(3) With respect to amounts recovered arising out of a 
     claim under a health plan, the portion of such amounts as is 
     determined to have been paid by the plan shall be repaid to 
     the plan, and the portion of such amounts attributable to the 
     amounts recovered under this section by reason of the 
     amendments made by the Health Care Fraud Prevention Act of 
     1995 (as estimated by the Secretary) shall be deposited into 
     the Health Care Fraud and Abuse Control Account established 
     under section 101(b) of such Act.''.
       (3) In subsection (i)--
       (A) in paragraph (2), by inserting ``or under a health 
     plan'' before the period at the end, and
       (B) in paragraph (5), by inserting ``or under a health 
     plan'' after ``or XX''.
       (b) Excluded Individual Retaining Ownership or Control 
     Interest in Participating Entity.--Section 1128A(a) of the 
     Social Security Act (42 U.S.C. 1320a-7a(a)) is amended--
       (1) by striking ``or'' at the end of paragraph (1)(D);
       (2) by striking ``, or'' at the end of paragraph (2) and 
     inserting a semicolon;
       (3) by striking the semicolon at the end of paragraph (3) 
     and inserting ``; or''; and
       (4) by inserting after paragraph (3) the following new 
     paragraph:
       ``(4) in the case of a person who is not an organization, 
     agency, or other entity, is excluded from participating in a 
     program under title XVIII or a State health care program in 
     accordance with this subsection or under section 1128 and 
     who, at the time of a violation of this subsection, retains a 
     direct or indirect ownership or control interest of 5 percent 
     or more, or an ownership or control interest (as defined in 
     section 1124(a)(3)) in, or who is an officer, director, 
     agent, or managing employee (as defined in section 1126(b)) 
     of, an entity that is participating in a program under title 
     XVIII or a State health care program;''.
       (c) Modifications of Amounts of Penalties and 
     Assessments.--Section 1128A(a) of the Social Security Act (42 
     U.S.C. 1320a-7a(a)), as amended by subsection (b), is amended 
     in the matter following paragraph (4)--
       (1) by striking ``$2,000'' and inserting ``$10,000'';
       (2) by inserting ``; in cases under paragraph (4), $10,000 
     for each day the prohibited relationship occurs'' after 
     ``false or misleading information was given''; and
       (3) by striking ``twice the amount'' and inserting ``3 
     times the amount''.
       (d) Claim for Item or Service Based on Incorrect Coding or 
     Medically Unnecessary Services.--Section 1128A(a)(1) of the 
     Social Security Act (42 U.S.C. 1320a-7a(a)(1)) is amended--
       (1) in subparagraph (A) by striking ``claimed,'' and 
     inserting the following: ``claimed, including any person who 
     repeatedly presents or causes to be presented a claim for an 
     item or service that is based on a code that the person knows 
     or should know will result in a greater payment to the person 
     than the code the person knows or should know is applicable 
     to the item or service actually provided,'';
       (2) in subparagraph (C), by striking ``or'' at the end;
       (3) in subparagraph (D), by striking ``; or'' and inserting 
     ``, or''; and
       (4) by inserting after subparagraph (D) the following new 
     subparagraph:
       ``(E) is for a medical or other item or service that a 
     person repeatedly knows or should know is not medically 
     necessary; or''.
       (e) Permitting Secretary To Impose Civil Monetary 
     Penalty.--Section 1128A(b) of the Social Security Act (42 
     U.S.C. 1320a-7a(a)) is amended by adding the following new 
     paragraph:
       ``(3) Any person (including any organization, agency, or 
     other entity, but excluding a beneficiary as defined in 
     subsection (i)(5)) who the Secretary determines has violated 
     section 1128B(b) of this title shall be subject to a civil 
     monetary penalty of not more than $10,000 for each such 
     violation. In addition, such person shall be subject to an 
     assessment of not more than twice the total amount of the 
     remuneration offered, paid, solicited, or received in 
     violation of section 1128B(b). The total amount of 
     remuneration subject to an assessment shall be calculated 
     without regard to whether some portion thereof also may have 
     been intended to serve a purpose other than one proscribed by 
     section 1128B(b).''.
       (f) Sanctions Against Practitioners and Persons for Failure 
     To Comply With Statutory Obligations.--Section 1156(b)(3) of 
     the Social Security Act (42 U.S.C. 1320c-5(b)(3)) is amended 
     by striking ``the actual or estimated cost'' and inserting 
     the following: ``up to $10,000 for each instance''.
       (g) Procedural Provisions.--Section 1876(i)(6) of such Act 
     (42 U.S.C. 1395mm(i)(6)) is further amended by adding at the 
     end the following new subparagraph:
       ``(D) The provisions of section 1128A (other than 
     subsections (a) and (b)) shall apply to a civil money penalty 
     under subparagraph (A) or (B) in the same manner as they 
     apply to a civil money penalty or proceeding under section 
     1128A(a).''.
       (h) Effective Date.--The amendments made by this section 
     shall take effect January 1, 1996.
       (i) Prohibition Against Offering Inducements to Individuals 
     Enrolled Under Programs or Plans.--
       (1) Offer of remuneration.--Section 1128A(a) of the Social 
     Security Act (42 U.S.C. 1320a-7a(a)) is amended--
       (A) by striking ``or'' at the end of paragraph (1)(D);
       (B) by striking ``, or'' at the end of paragraph (2) and 
     inserting a semicolon;
       (C) by striking the semicolon at the end of paragraph (3) 
     and inserting ``; or''; and
       (D) by inserting after paragraph (3) the following new 
     paragraph:
       ``(4) offers to or transfers remuneration to any individual 
     eligible for benefits under title XVIII of this Act, or under 
     a State health care program (as defined in section 1128(h)) 
     that such person knows or should know is likely to influence 
     such individual to order or receive from a particular 
     provider, practitioner, or supplier any item or service for 
     which payment may be made, in whole or in part, under title 
     XVIII, or a State health care program;''.
       (2) Remuneration defined.--Section 1128A(i) of such Act (42 
     U.S.C. 1320a-7a(i)) is amended by adding the following new 
     paragraph:
       ``(6) The term `remuneration' includes the waiver of 
     coinsurance and deductible amounts (or any part thereof), and 
     transfers of items or services for free or for other than 
     fair market value. The term `remuneration' does not include--
       ``(A) the waiver of coinsurance and deductible amounts by a 
     person, if--
       ``(i) the waiver is not offered as part of any 
     advertisement or solicitation;
       ``(ii) the person does not routinely waive coinsurance or 
     deductible amounts; and
       ``(iii) the person--
     [[Page S1941]]   ``(I) waives the coinsurance and deductible 
     amounts after determining in good faith that the individual 
     is in financial need;
       ``(II) fails to collect coinsurance or deductible amounts 
     after making reasonable collection efforts; or
       ``(III) provides for any permissible waiver as specified in 
     section 1128B(b)(3) or in regulations issued by the 
     Secretary;

       ``(B) differentials in coinsurance and deductible amounts 
     as part of a benefit plan design as long as the differentials 
     have been disclosed in writing to all third party payors to 
     whom claims are presented and as long as the differentials 
     meet the standards as defined in regulations promulgated by 
     the Secretary; or
       ``(C) incentives given to individuals to promote the 
     delivery of preventive care as determined by the Secretary in 
     regulations.''.
     Subtitle D--Payments for State Health Care Fraud Control Units

     SEC. 5401. ESTABLISHMENT OF STATE FRAUD UNITS.

       (a) Establishment of Health Care Fraud and Abuse Control 
     Unit.--The Governor of each State shall, consistent with 
     State law, establish and maintain in accordance with 
     subsection (b) a State agency to act as a Health Care Fraud 
     and Abuse Control Unit for purposes of this subtitle.
       (b) Definition.--In this section, a ``State Fraud Unit'' 
     means a Health Care Fraud and Abuse Control Unit designated 
     under subsection (a) that the Secretary certifies meets the 
     requirements of this subtitle.

     SEC. 5402. REQUIREMENTS FOR STATE FRAUD UNITS.

       (a) In General.--The State Fraud Unit must--
       (1) be a single identifiable entity of the State 
     government;
       (2) be separate and distinct from any State agency with 
     principal responsibility for the administration of any 
     Federally-funded or mandated health care program;
       (3) meet the other requirements of this section.
       (b) Specific Requirements Described.--The State Fraud Unit 
     shall--
       (1) be a Unit of the office of the State Attorney General 
     or of another department of State government which possesses 
     statewide authority to prosecute individuals for criminal 
     violations;
       (2) if it is in a State the constitution of which does not 
     provide for the criminal prosecution of individuals by a 
     statewide authority and has formal procedures, (A) assure its 
     referral of suspected criminal violations to the appropriate 
     authority or authorities in the State for prosecution, and 
     (B) assure its assistance of, and coordination with, such 
     authority or authorities in such prosecutions; or
       (3) have a formal working relationship with the office of 
     the State Attorney General or the appropriate authority or 
     authorities for prosecution and have formal procedures 
     (including procedures for its referral of suspected criminal 
     violations to such office) which provide effective 
     coordination of activities between the Fraud Unit and such 
     office with respect to the detection, investigation, and 
     prosecution of suspected criminal violations relating to any 
     Federally-funded or mandated health care programs.
       (c) Staffing Requirements.--The State Fraud Unit shall--
       (1) employ attorneys, auditors, investigators and other 
     necessary personnel; and
       (2) be organized in such a manner and provide sufficient 
     resources as is necessary to promote the effective and 
     efficient conduct of State Fraud Unit activities.
       (d) Cooperative Agreements; Memoranda of Understanding.--
     The State Fraud Unit shall have cooperative agreements with--
       (1) Federally-funded or mandated health care programs;
       (2) similar Fraud Units in other States, as exemplified 
     through membership and participation in the National 
     Association of Medicaid Fraud Control Units or its successor; 
     and
       (3) the Secretary.
       (e) Reports.--The State Fraud Unit shall submit to the 
     Secretary an application and an annual report containing such 
     information as the Secretary determines to be necessary to 
     determine whether the State Fraud Unit meets the requirements 
     of this section.
       (f) Funding Source; Participation in All-Payer Program.--In 
     addition to those sums expended by a State under section 
     5404(a) for purposes of determining the amount of the 
     Secretary's payments, a State Fraud Unit may receive funding 
     for its activities from other sources, the identity of which 
     shall be reported to the Secretary in its application or 
     annual report. The State Fraud Unit shall participate in the 
     all-payer fraud and abuse control program established under 
     section 5101.

     SEC. 5403. SCOPE AND PURPOSE.

       The State Fraud Unit shall carry out the following 
     activities:
       (1) The State Fraud Unit shall conduct a statewide program 
     for the investigation and prosecution (or referring for 
     prosecution) of violations of all applicable state laws 
     regarding any and all aspects of fraud in connection with any 
     aspect of the administration and provision of health care 
     services and activities of providers of such services under 
     any Federally-funded or mandated health care programs;
       (2) The State Fraud Unit shall have procedures for 
     reviewing complaints of the abuse or neglect of patients of 
     facilities (including patients in residential facilities and 
     home health care programs) that receive payments under any 
     Federally-funded or mandated health care programs, and, where 
     appropriate, to investigate and prosecute such complaints 
     under the criminal laws of the State or for referring the 
     complaints to other State agencies for action.
       (3) The State Fraud Unit shall provide for the collection, 
     or referral for collection to the appropriate agency, of 
     overpayments that are made under any Federally-funded or 
     mandated health care program and that are discovered by the 
     State Fraud Unit in carrying out its activities.

     SEC. 5404. PAYMENTS TO STATES.

       (a) Matching Payments to States.--Subject to subsection 
     (c), for each year for which a State has a State Fraud Unit 
     approved under section 5402(b) in operation the Secretary 
     shall provide for a payment to the State for each quarter in 
     a fiscal year in an amount equal to the applicable percentage 
     of the sums expended during the quarter by the State Fraud 
     Unit.
       (b) Applicable Percentage Defined.--
       (1) In general.--In subsection (a), the ``applicable 
     percentage'' with respect to a State for a fiscal year is--
       (A) 90 percent, for quarters occurring during the first 3 
     years for which the State Fraud Unit is in operation; or
       (B) 75 percent, for any other quarters.
       (2) Treatment of states with medicaid fraud control 
     units.--In the case of a State with a State medicaid fraud 
     control in operation prior to or as of the date of the 
     enactment of this Act, in determining the number of years for 
     which the State Fraud Unit under this subtitle has been in 
     operation, there shall be included the number of years for 
     which such State medicaid fraud control unit was in 
     operation.
       (c) Limit on Payment.--Notwithstanding subsection (a), the 
     total amount of payments made to a State under this section 
     for a fiscal year may not exceed the amounts as authorized 
     pursuant to section 1903(b)(3) of the Social Security Act.
                      TITLE VI--REVENUE PROVISIONS

     SEC. 6000. AMENDMENT OF 1986 CODE.

       Except as otherwise expressly provided, whenever in this 
     title an amendment or repeal is expressed in terms of an 
     amendment to, or repeal of, a section or other provision, the 
     reference shall be considered to be made to a section or 
     other provision of the Internal Revenue Code of 1986.
                    Subtitle A--Financing Provisions
              PART I--INCREASE IN TAX ON TOBACCO PRODUCTS
     SEC. 6001. INCREASE IN EXCISE TAXES ON TOBACCO PRODUCTS.

       (a) Cigarettes.--Subsection (b) of section 5701 is 
     amended--
       (1) by striking ``$12 per thousand ($10 per thousand on 
     cigarettes removed during 1991 or 1992)'' in paragraph (1) 
     and inserting ``$62 per thousand'', and
       (2) by striking ``$25.20 per thousand ($21 per thousand on 
     cigarettes removed during 1991 or 1992)'' in paragraph (2) 
     and inserting ``$130.20 per thousand''.
       (b) Cigars.--Subsection (a) of section 5701 is amended--
       (1) by striking ``$1.125 cents per thousand (93.75 cents 
     per thousand on cigars removed during 1991 or 1992)'' in 
     paragraph (1) and inserting ``$51.13 per thousand'', and
       (2) by striking ``equal to'' and all that follows in 
     paragraph (2) and inserting ``equal to 66 percent of the 
     price for which sold but not more than $155 per thousand.''
       (c) Cigarette Papers.--Subsection (c) of section 5701 is 
     amended by striking ``0.75 cent (0.625 cent on cigarette 
     papers removed during 1991 or 1992)'' and inserting ``3.88 
     cents''.
       (d) Cigarette Tubes.--Subsection (d) of section 5701 is 
     amended by striking ``1.5 cents (1.25 cents on cigarette 
     tubes removed during 1991 or 1992)'' and inserting ``7.76 
     cents''.
       (e) Smokeless Tobacco.--Subsection (e) of section 5701 is 
     amended--
       (1) by striking ``36 cents (30 cents on snuff removed 
     during 1991 or 1992)'' in paragraph (1) and inserting 
     ``$13.69'', and
       (2) by striking ``12 cents (10 cents on chewing tobacco 
     removed during 1991 or 1992)'' in paragraph (2) and inserting 
     ``$5.45''.
       (f) Pipe Tobacco.--Subsection (f) of section 5701 is 
     amended by striking ``67.5 cents (56.25 cents on pipe tobacco 
     removed during 1991 or 1992)'' and inserting ``$17.35''.
       (g) Application of Tax Increase to Puerto Rico.--Section 
     5701 is amended by adding at the end the following new 
     subsection:
       ``(h) Application to Taxes to Puerto Rico.--Notwithstanding 
     subsections (b) and (c) of section 7653 and any other 
     provision of law--
       ``(1) In general.--On tobacco products and cigarette papers 
     and tubes, manufactured or imported into the Commonwealth of 
     Puerto Rico, there is hereby imposed a tax at the rate equal 
     to the excess of--
       ``(A) the rate of tax applicable under this section to like 
     articles manufactured in the United States, over
       ``(B) the rate referred to in subparagraph (A) as in effect 
     on the day before the date of the enactment of the Health 
     Partnership Act of 1995.
       ``(2) Shipments to puerto rico from the united states.--
     Only the rates of tax in effect on the day before the date of 
     the enactment of this subsection shall be taken into account 
     in determining the amount of any 
     [[Page S1942]] exemption from, or credit or drawback of, any 
     tax imposed by this section on any article shipped to the 
     Commonwealth of Puerto Rico from the United States.
       ``(3) Shipments from puerto rico to the united states.--The 
     rates of tax taken into account under section 7652(a) with 
     respect to tobacco products and cigarette papers and tubes 
     coming into the United States from the Commonwealth of Puerto 
     Rico shall be the rates of tax in effect on the day before 
     the date of the enactment of the Health Partnership Act of 
     1995.
       ``(4) Disposition of revenues.--The provisions of section 
     7652(a)(3) shall not apply to any tax imposed by reason of 
     this subsection.''
       (h) Effective Date.--The amendments made by this section 
     shall apply to articles removed (as defined in section 
     5702(k) of the Internal Revenue Code of 1986, as amended by 
     this Act) after December 31, 1995.
       (i) Floor Stocks Taxes.--
       (1) Imposition of tax.--On tobacco products and cigarette 
     papers and tubes manufactured in or imported into the United 
     States or the Commonwealth of Puerto Rico which are removed 
     before any tax-increase date, and held on such date for sale 
     by any person, there is hereby imposed a tax in an amount 
     equal to the excess of--
       (A) the tax which would be imposed under section 5701 of 
     the Internal Revenue Code of 1986 on the article if the 
     article had been removed on such date, over
       (B) the prior tax (if any) imposed under section 5701 or 
     7652 of such Code on such article.
       (2) Authority to exempt cigarettes held in vending 
     machines.--To the extent provided in regulations prescribed 
     by the Secretary, no tax shall be imposed by paragraph (1) on 
     cigarettes held for retail sale on any tax-increase date, by 
     any person in any vending machine. If the Secretary provides 
     such a benefit with respect to any person, the Secretary may 
     reduce the $500 amount in paragraph (3) with respect to such 
     person.
       (3) Credit against tax.--Each person shall be allowed as a 
     credit against the taxes imposed by paragraph (1) an amount 
     equal to $500. Such credit shall not exceed the amount of 
     taxes imposed by paragraph (1) on each tax-increase date for 
     which such person is liable.
       (4) Liability for tax and method of payment.--
       (A) Liability for tax.--A person holding cigarettes on any 
     tax-increase date, to which any tax imposed by paragraph (1) 
     applies shall be liable for such tax.
       (B) Method of payment.--The tax imposed by paragraph (1) 
     shall be paid in such manner as the Secretary shall prescribe 
     by regulations.
       (C) Time for payment.--The tax imposed by paragraph (1) 
     shall be paid on or before the date which is 3 months after 
     the tax-increase date.
       (5) Articles in foreign trade zones.--Notwithstanding the 
     Act of June 18, 1934 (48 Stat. 998, 19 U.S.C. 81a) and any 
     other provision of law, any article which is located in a 
     foreign trade zone on any tax-increase date shall be subject 
     to the tax imposed by paragraph (1) if--
       (A) internal revenue taxes have been determined, or customs 
     duties liquidated, with respect to such article before such 
     date pursuant to a request made under the 1st proviso of 
     section 3(a) of such Act, or
       (B) such article is held on such date under the supervision 
     of a customs officer pursuant to the 2d proviso of such 
     section 3(a).
       (6) Definitions.--For purposes of this subsection--
       (A) In general.--Terms used in this subsection which are 
     also used in section 5702 of the Internal Revenue Code of 
     1986 shall have the respective meanings such terms have in 
     such section, as amended by this Act.
       (B) Secretary.--The term ``Secretary'' means the Secretary 
     of the Treasury or his delegate.
       (C) Tax-increase date.--The term ``tax-increase date'' 
     means January 1, 1996, and July 1, 1997.
       (7) Controlled groups.--Rules similar to the rules of 
     section 5061(e)(3) of such Code shall apply for purposes of 
     this subsection.
       (8) Other laws applicable.--All provisions of law, 
     including penalties, applicable with respect to the taxes 
     imposed by section 5701 of such Code shall, insofar as 
     applicable and not inconsistent with the provisions of this 
     subsection, apply to the floor stocks taxes imposed by 
     paragraph (1), to the same extent as if such taxes were 
     imposed by such section 5701. The Secretary may treat any 
     person who bore the ultimate burden of the tax imposed by 
     paragraph (1) as the person to whom a credit or refund under 
     such provisions may be allowed or made.

     SEC. 6002. MODIFICATIONS OF CERTAIN TOBACCO TAX PROVISIONS.

       (a) Exemption for Exported Tobacco Products and Cigarette 
     Papers and Tubes To Apply Only to Articles Marked for 
     Export.--
       (1) Subsection (b) of section 5704 is amended by adding at 
     the end the following new sentence: ``Tobacco products and 
     cigarette papers and tubes may not be transferred or removed 
     under this subsection unless such products or papers and 
     tubes bear such marks, labels, or notices as the Secretary 
     shall by regulations prescribe.''
       (2) Section 5761 is amended by redesignating subsections 
     (c) and (d) as subsections (d) and (e), respectively, and by 
     inserting after subsection (b) the following new subsection:
       ``(c) Sale of Tobacco Products and Cigarette Papers and 
     Tubes for Export.--Except as provided in subsections (b) and 
     (d) of section 5704--
       ``(1) every person who sells, relands, or receives within 
     the jurisdiction of the United States any tobacco products or 
     cigarette papers or tubes which have been labeled or shipped 
     for exportation under this chapter,
       ``(2) every person who sells or receives such relanded 
     tobacco products or cigarette papers or tubes, and
       ``(3) every person who aids or abets in such selling, 
     relanding, or receiving,

     shall, in addition to the tax and any other penalty provided 
     in this title, be liable for a penalty equal to the greater 
     of $1,000 or 5 times the amount of the tax imposed by this 
     chapter. All tobacco products and cigarette papers and tubes 
     relanded within the jurisdiction of the United States, and 
     all vessels, vehicles, and aircraft used in such relanding or 
     in removing such products, papers, and tubes from the place 
     where relanded, shall be forfeited to the United States.''.
       (3) Subsection (a) of section 5761 is amended by striking 
     ``subsection (b)'' and inserting ``subsection (b) or (c)''.
       (4) Subsection (d) of section 5761, as redesignated by 
     paragraph (2), is amended by striking ``The penalty imposed 
     by subsection (b)'' and inserting ``The penalties imposed by 
     subsections (b) and (c)''.
       (5)(A) Subpart F of chapter 52 is amended by adding at the 
     end the following new section:

     ``SEC. 5754. RESTRICTION ON IMPORTATION OF PREVIOUSLY 
                   EXPORTED TOBACCO PRODUCTS.

       ``(a) In General.--Tobacco products and cigarette papers 
     and tubes previously exported from the United States may be 
     imported or brought into the United States only as provided 
     in section 5704(d). For purposes of this section, section 
     5704(d), section 5761, and such other provisions as the 
     Secretary may specify by regulations, references to 
     exportation shall be treated as including a reference to 
     shipment to the Commonwealth of Puerto Rico.
       ``(b) Cross Reference.--
  ``For penalty for the sale of tobacco products and cigarette papers 
and tubes in the United States which are labeled for export, see 
section 5761(c).''.
       (B) The table of sections for subpart F of chapter 52 is 
     amended by adding at the end the following new item:

``Sec. 5754. Restriction on importation of previously exported tobacco 
              products.''.

       (b) Importers Required To Be Qualified.--
       (1) Sections 5712, 5713(a), 5721, 5722, 5762(a)(1), and 
     5763(b) and (c) are each amended by inserting ``or importer'' 
     after ``manufacturer''.
       (2) The heading of subsection (b) of section 5763 is 
     amended by inserting ``Qualified Importers,'' after 
     ``Manufacturers,''.
       (3) The heading for subchapter B of chapter 52 is amended 
     by inserting ``and Importers'' after ``Manufacturers''.
       (4) The item relating to subchapter B in the table of 
     subchapters for chapter 52 is amended by inserting ``and 
     importers'' after ``manufacturers''.
       (c) Repeal of Tax-Exempt Sales to Employees of Cigarette 
     Manufacturers.--
       (1) Subsection (a) of section 5704 is amended--
       (A) by striking ``Employee Use or'' in the heading, and
       (B) by striking ``for use or consumption by employees or'' 
     in the text.
       (2) Subsection (e) of section 5723 is amended by striking 
     ``for use or consumption by their employees, or for 
     experimental purposes'' and inserting ``for experimental 
     purposes''.
       (d) Repeal of Tax-Exempt Sales to United States.--
     Subsection (b) of section 5704 is amended by striking ``and 
     manufacturers may similarly remove such articles for use of 
     the United States;''.
       (e) Books of 25 or Fewer Cigarette Papers Subject to Tax.--
     Subsection (c) of section 5701 is amended by striking ``On 
     each book or set of cigarette papers containing more than 25 
     papers,'' and inserting ``On cigarette papers,''.
       (f) Storage of Tobacco Products.--Subsection (k) of section 
     5702 is amended by inserting ``under section 5704'' after 
     ``internal revenue bond''.
       (g) Authority To Prescribe Minimum Manufacturing Activity 
     Requirements.--Section 5712 is amended by striking ``or'' at 
     the end of paragraph (1), by redesignating paragraph (2) as 
     paragraph (3), and by inserting after paragraph (1) the 
     following new paragraph:
       ``(2) the activity proposed to be carried out at such 
     premises does not meet such minimum capacity or activity 
     requirements as the Secretary may prescribe, or''.
       (h) Special Rules Relating to Puerto Rico and the Virgin 
     Islands.--Section 7652 is amended by adding at the end the 
     following new subsection:
       ``(h) Limitation on Cover Over of Tax on Tobacco 
     Products.--For purposes of this section, with respect to 
     taxes imposed under section 5701 or this section on any 
     tobacco product or cigarette paper or tube, the amount 
     covered into the treasuries of Puerto Rico and the Virgin 
     Islands shall not exceed the rate of tax under section 5701 
     in effect on the article on the day before the date of the 
     enactment of the Health Partnership Act of 1995.''.
     [[Page S1943]]   (i) Effective Date.--The amendments made by 
     this section shall apply to articles removed (as defined in 
     section 5702(k) of the Internal Revenue Code of 1986, as 
     amended by this Act) after December 31, 1995.

     SEC. 6003. IMPOSITION OF EXCISE TAX ON MANUFACTURE OR 
                   IMPORTATION OF ROLL-YOUR-OWN TOBACCO.

       (a) In General.--Section 5701 (relating to rate of tax), as 
     amended by section 701, is amended by redesignating 
     subsections (g) and (h) as subsections (h) and (i) and by 
     inserting after subsection (f) the following new subsection:
       ``(g) Roll-Your-Own Tobacco.--On roll-your-own tobacco, 
     manufactured in or imported into the United States, there 
     shall be imposed a tax of $17.35 per pound (and a 
     proportionate tax at the like rate on all fractional parts of 
     a pound).''.
       (b) Roll-Your-Own Tobacco.--Section 5702 (relating to 
     definitions) is amended by adding at the end the following 
     new subsection:
       ``(p) Roll-Your-Own Tobacco.--The term `roll-your-own 
     tobacco' means any tobacco which, because of its appearance, 
     type, packaging, or labeling, is suitable for use and likely 
     to be offered to, or purchased by, consumers as tobacco for 
     making cigarettes.''.
       (c) Technical Amendments.--
       (1) Subsection (c) of section 5702 is amended by striking 
     ``and pipe tobacco'' and inserting ``pipe tobacco, and roll-
     your-own tobacco''.
       (2) Subsection (d) of section 5702 is amended--
       (A) in the material preceding paragraph (1), by striking 
     ``or pipe tobacco'' and inserting ``pipe tobacco, or roll-
     your-own tobacco'', and
       (B) by striking paragraph (1) and inserting the following 
     new paragraph:
       ``(1) a person who produces cigars, cigarettes, smokeless 
     tobacco, pipe tobacco, or roll-your-own tobacco solely for 
     the person's own personal consumption or use, and''.
       (3) The chapter heading for chapter 52 is amended to read 
     as follows:
    ``CHAPTER 52--TOBACCO PRODUCTS AND CIGARETTE PAPERS AND TUBES''.

       (4) The table of chapters for subtitle E is amended by 
     striking the item relating to chapter 52 and inserting the 
     following new item:

``Chapter 52. Tobacco products and cigarette papers and tubes.''.

       (d) Effective Date.--
       (1) In general.--The amendments made by this section shall 
     apply to roll-your-own tobacco removed (as defined in section 
     5702(k) of the Internal Revenue Code of 1986, as amended by 
     this Act) after December 31, 1995.
       (2) Transitional rule.--Any person who--
       (A) on the date of the enactment of this Act is engaged in 
     business as a manufacturer of roll-your-own tobacco or as an 
     importer of tobacco products or cigarette papers and tubes, 
     and
       (B) before January 1, 1995, submits an application under 
     subchapter B of chapter 52 of such Code to engage in such 
     business,

     may, notwithstanding such subchapter B, continue to engage in 
     such business pending final action on such application. 
     Pending such final action, all provisions of such chapter 52 
     shall apply to such applicant in the same manner and to the 
     same extent as if such applicant were a holder of a permit 
     under such chapter 52 to engage in such business.
               Subtitle B--Health Care Reform Trust Fund

     SEC. 6101. ESTABLISHMENT OF HEALTH CARE REFORM TRUST FUND.

       (a) In General.--Subchapter A of chapter 98 (relating to 
     establishment of trust funds) is amended by adding at the end 
     the following new part:

                   ``PART II--HEALTH CARE TRUST FUNDS
``Sec. 9551. Health Care Reform Trust Fund
     ``SEC. 9551. HEALTH CARE REFORM TRUST FUND.

       ``(a) Creation of Trust Fund.--There is established in the 
     Treasury of the United States a trust fund to be known as the 
     `Health Care Reform Trust Fund', consisting of such amounts 
     as may be appropriated or credited to the Health Care Reform 
     Trust Fund as provided in this section.
       ``(b) Transfers to the Trust Fund.--There are hereby 
     appropriated to the Health Care Reform Trust Fund amounts 
     received in the Treasury under section 5701 (relating to 
     taxes on tobacco products) to the extent attributable to the 
     increases in such taxes as the result of the enactment of 
     subtitle A of title VI of the Health Partnership Act of 1995.
       ``(c) Expenditures.--Amounts in the Health Care Reform 
     Trust Fund are appropriated as provided for in sections 2001 
     and 4003 of the Health Partnership Act of 1995, and title 
     XXVII of the Public Health Service Act, and to the extent any 
     such amount is not expended during any fiscal year, such 
     amount shall be available for such purpose for subsequent 
     fiscal years.
       ``(d) Other Rules.--
       ``(1) Insufficient funds.--If, for any fiscal year, the sum 
     of the amounts required to be allocated under subsection (c) 
     exceeds the amounts received in the Health Care Reform Trust 
     Fund, then each of such amounts required to be so allocated 
     shall be reduced to an amount which bears the same ratio to 
     such amount as the amounts received in the trust fund bear to 
     the amounts required to be so allocated (without regard to 
     this paragraph).
       ``(2) Allocation of excess funds and interest.--Amounts 
     received in the Health Care Reform Trust Fund in excess of 
     the amounts required to be allocated under subsection (c), 
     for any fiscal year shall be allocated ratably on the basis 
     of the amounts allocated for the fiscal year (without regard 
     to this paragraph).''.
       (b) Conforming Amendment.--Subchapter A of chapter 98 is 
     amended by inserting after the subchapter heading the 
     following new items:

``Part I.  General trust funds.
``Part II. Health care trust fund.
``PART I--GENERAL TRUST FUNDS''.
                                                                    ____

                 Graham-Hatfield Health Partnership Act

       Purpose: To proceed with health care reform that increases 
     access, controls costs and improves the quality of health 
     care in states through state innovation, public health, 
     medical research, insurance reform and control of fraud and 
     abuse.
       States are making significant progress to reform their 
     health care delivery systems. In light of the inability of 
     Congress to enact comprehensive reform, this bill would 
     provide the states with the flexibility to continue their 
     reform efforts. It would also provide limited federal funding 
     to assist states in this effort.
       The bill includes the following provisions:


                    title i--health insurance reform

       Establishment of National Minimum Standards.--Congress 
     would direct the National Association of Insurance 
     Commissioners (NAIC) to develop national minimum standards 
     with respect to renewability, portability, guaranteed issue, 
     community rating, solvency and stop-loss. The Secretary of 
     Health and Human Services (HHS) would review the standards 
     developed by NAIC. Upon approval, these national minimum 
     standards would be established for the states, but they would 
     be given authority to enact and implement more progressive 
     reforms than those specified. This is modeled after the 
     Baucus Amendment to OBRA-90 relating to the development of 
     Medicare Supplemental Insurance Standards or Medigap.
       Medicare Select.--The 1990 Medigap legislation created 10 
     standard Medicare supplemental benefit packages that could be 
     offered nationwide. Managed care networks could offer these 
     benefits to Medicare beneficiaries in 15 states. This 
     program, Medicare Select, provides supplemental coverage to 
     hundreds of thousands of Medicare beneficiaries, but the 
     program will expire on June 30, 1995. This provision would 
     reauthorize the program and extend it to all 50 states.
                       Title II--State Innovation

       State Innovative Health Reform Projects.--States interested 
     in enacting health reform proposals that achieve the goals of 
     increased health coverage and access, control costs and 
     maintain or improve the quality of health care could submit 
     their projects to the Secretary for Medicaid, Maternal Child 
     Health Block Grant, Social Services Block Grant and Public 
     Health Service Act waivers and approval. An approved state 
     innovative project that can demonstrate the ability to meet 
     the goals of health reform would receive grant monies from 
     the federal government to encourage and help states funds the 
     projects. $50 billion will be made available to states over a 
     five-year period.
       Limited State Health Care Waivers.--States would also be 
     allowed to pursue more limited state health care waivers that 
     are likely to increase administrative efficiencies or provide 
     guidance for the development of improved health delivery 
     systems. The waiver application for both the comprehensive 
     and limited waiver projects would be placed on an expedited 
     approval process.
       Evaluation, Monitoring and Compliance.--The Secretary and 
     an established State Health Reform Advisory Board would be 
     responsible for monitoring the waiver projects. Waiver 
     projects could be terminated by the Secretary for good cause 
     and states would not be allowed to supplant state funding 
     with grants received under this program.
       Lessons from the States/Report to Congress.--At the end of 
     the five-year period, the Board would report to Congress on 
     the progress made by states with respect to expanding health 
     insurance coverage and cost containment. The Board would also 
     make recommendations to Congress concerning any further 
     action Congress should take concerning health care reform 
     from the information and experiences drawn from the states.
       Existing State Laws.--States that have existing Medicaid 
     and Medicare waivers are continued and not preempted by this 
     Act. Hawaii would be granted a continued exemption from ERISA 
     preemption.
       ERISA Review.--To allow states to move forward with 
     meaningful comprehensive health care reform while fully 
     recognizing the needs of employers in administering self-
     funded plans across state lines, an ERISA Review Commission 
     is established to find common ground, clarify what is 
     permissible under ERISA and ensure the interests of self-
     insured plans are addressed. The Commission will be composed 
     of representatives from state and local government, business, 
     labor and the federal government.


   title iii--public health, rural and underserved access improvement

       Core Functions of Public Health.--Core functions are those 
     activities and programs that emphasize population-based 
     health 
     [[Page S1944]] measures such as the investigation and control 
     of threats to the health of communities such as communicable 
     diseases (tuberculosis, HIV, measles, influenza), 
     environmental hazards (air pollution, radon, radiation, waste 
     and sewage disposal), toxic pollutants (lead-based paint, 
     contaminated drinking water) and emerging patterns of acute 
     and chronic disease and injury (food borne poisoning, cancer, 
     heart disease).
       Other Programs.--Funding is also made available for 
     comprehensive evaluation of disease prevention and health 
     promotion programs, Schools of Public Health, Area Health 
     Education Centers, Health Education Training Centers, 
     Regional Poison Control Centers, school-related health 
     services, Community and Migrant Health Centers, the National 
     Health Service Corps, satellite primary car clinics and 
     community health advisors.
       Funding.--This title is allocated $9 billion over a five-
     year period.
                       Title IV--Medical Research

       National Institute of Health (NIH) Funding.--$6 billion 
     would be allocated over a five-year period under this title 
     to expand our national commitment to health research. Monies 
     are allocated to the NIH Institutes and Centers on the same 
     basis as annual appropriations. Five percent of the monies 
     will be directed to extramural construction and renovation of 
     research facilities, the National Library of Medicine and the 
     Office of the Director.


                        Title V--Fraud and Abuse

       Federal-State-Private Sector Coordination.--This title 
     tracks much of the language from Senator Bill Cohen's 
     ``Health Care Fraud Prevention Act of 1995''. An improved 
     federal-state-private sector collaboration to combat fraud 
     and abuse would be established. Moreover, certain existing 
     criminal and civil penalties would be expanded to eliminate 
     waste in the health care system.


                     Title VI--Financing Provisions

       Tobacco Tax.--The bill will be financed through a $1 tax on 
     tobacco products. This tax is expected to raise $65 billion 
     over five years.


                Not Included--Medicaid and Medicare Cuts

       There are no Medicaid and Medicare cuts included in the 
     Graham-Hatfield proposal.

     

                          ____________________